Downsizer Super Contributions

Upsize your super with downsizer contributions

June 2019

Individuals aged 65 or over are able to make additional super contributions of up to $300,000 per person from the proceeds of the sale of their home.

These are known as ‘downsizer contributions’ and they can be made on top of the existing contribution caps, without having to meet certain contribution rules and restrictions.

The opportunity

The downsizer contribution rules remove some of the barriers that prevent or restrict the ability to make super contributions at age 65 or over.

Provided certain other conditions are met (see below) eligible people will be able to contribute up to $300,000 per person (or $600,000 per couple) from the proceeds of selling their home.

The contributions won’t count towards the concessional (pre-tax) or non-concessional (after-tax) contribution caps and there is no maximum age limit. Also, the ‘work test’ (for people aged 65 to 74) and the ‘total super balance’ test won’t apply.

Craig at HQB Financial Solutions sees this incentive as an excellent opportunity to increase Super benefits in a concessional taxed and potentially tax free environment. To check if your eligible, give Craig a call on (02) 66993649 or contact here.

Key requirements

There are a number of conditions that will need to be met to be eligible to make downsizer contributions, including:

  • The individual must be aged 65 or over at the time the contribution is made.
  • The property must have been owned by the individual or their spouse (but not necessarily both) for at least 10 years prior to the disposal.
  • The contract for sale must be entered into on or after 1 July 2018.
  • The property must qualify for the main residence capital gains tax exemption in whole or part, so properties held purely for investment purposes won’t qualify.
  • The contribution must be made within 90 days of receiving the proceeds of sale, which is usually at the date of settlement.
  • An election needs to be made to treat the contribution as a downsizer contribution.
  • No tax deduction can be claimed for the contribution.

Other conditions may also apply. For more information, please visit the ATO website at www.ato.gov.au

Continue to the full article and case study upsize-your-super-with-downsizer-contributions

Downsizer Contributions

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