Contributing the proceeds of downsizing into superannuation measure was one of several announced in the 2017–18 Budget as part of the government’s package of reforms to reduce pressure on housing affordability in Australia.
You may be able to choose to make a downsizer contribution into your superannuation of up to $300,000 from the proceeds of selling your home.
The downsizer contribution can still be made even if you have a total super balance greater than $1.6 million.
Your downsizer contribution will not affect your total superannuation balance until your total super balance is re-calculated to include all your contributions, including your downsizer contributions, on 30 June at the end of the financial year.
The downsizer contribution will count towards your transfer balance cap, currently set at $1.6 million. This cap applies when you move your super savings into retirement phase.
You can only access the downsizer scheme once. This means you can only make downsizing contributions for the sale or disposal of one home, including the sale of a part interest in a home. You cannot access the downsizer scheme again where there is a subsequent sale or disposal.
Downsizer contributions are not tax deductible and will be taken into account for determining eligibility for the age pension.
If you sell your home, are eligible and choose to make a downsizer contribution, there is no requirement for you to purchase another home.
If your home that was sold was only owned by one spouse, the spouse that did not have an ownership interest may also make a downsizer contribution, or have one made on their behalf, provided they meet all of the other requirements.
Downsizer contribution amounts.
If eligible, you can make a downsizer contribution up to a maximum of $300,000 (each). The contribution amount cannot be greater than the total proceeds of the sale of your home. The downsizer contribution would form part of the member’s tax-free component held in the fund.
Example 1
A couple, George and Jane, sell their home for $800,000. Each spouse can contribute of up to $300,000.
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