What is contribution from a “downsizer”?

If you are 55 or older, you can put $300,000 into your superannuation fund from the money you get from selling your home.

The age test, the work test, and the transfer balance threshold do not apply to downsizer contributions (but are limited by your transfer balance cap).

For couples, both people living in the same home can take advantage of the concession. That is, if you and your spouse meet the other requirements, each of you can put in up to $300,000, for a total of $600,000 for the two of you. Even if one of you didn’t own any part of the property that was sold, this is still true (assuming they meet the other criteria).

With this measure, money from a sale that is put into a superannuation account counts towards the Age Pension assets test. Because a downsizer contribution can only be made once in a person’s life, it is important to make sure that this is the right choice for you.

Let’s take a look at the eligible criteria:

• You are at least 55 years old (as of January 1, 2023) when you make the contribution.
• You or your spouse owned the home for at least 10 years before you sold it. Usually, the time you owned the home is counted from the day you bought it to the day you sold it.
• The house is in Australia and is not a caravan, houseboat, or other type of mobile home.
• The capital gain or loss from selling the home is exempt or partially exempt from capital gains tax (CGT) under the main residence exemption, or it would be if the home was a post-CGT asset instead of a pre-CGT asset (acquired before 20 September 1985). If you’re not sure, check with us.
• You give your super fund the Downsizer contribution into super form (NAT 75073) either before you make the downsizer contribution or at the same time.
• The downsizer contribution is paid within 90 days of getting the money from the property sale, which is usually when the settlement takes place.
• You haven’t made a downsizer contribution to your super before from the sale of another home.

Please contact Bates Cosgrave on 02 9957 4033 for more information about Downsizer contributions.