Downsizer contributions

Once you reach age 55, you may find yourself wanting to downsize your family home into something smaller or more suited to your changed needs.

How it works

The downsizer contribution allows eligible Australians aged 55 or older to sell their primary residence and contribute up to $300,000 ($600,000 for couples) of the proceeds into their super.

The amount your can contribute to super can’t be greater than the total proceeds of the sale of your home.

What are the benefits?

Boost your super

Downsizer contributions give your super an instant boost to your balance in retirement.

Start an income from your super in retirement

Downsizer contributions allow you to take advantage of a concessionally taxed or, if you are aged 60 or over, generally tax-free source of income, by using the wealth from the sale of your home to provide for your income needs in retirement.

Am I eligible?

To make a downsizer contribution:

• you must be aged 55* or over

• you (or your partner) must have owned the property for at least 10 years

• the property must have been your main residence for tax purposes at some time while you owned it

• the property you sell must be in Australia and doesn’t include caravans, mobile homes, or house boats

• the contract of sale of the property must be entered into on or after 1 July 2018

• the contribution to your super account must be made within 90 days of the settlement of the sale of your property, and

• you’re only able to make a Downsizer contribution with the sale proceeds from one eligible property in your lifetime, regardless of whether the cap has been fully used.

Downsizer contributions – learn more with one of our financial coaches.

Upsize your super with downsizer contributions. Downsizer contributions are an additional contribution type, made available to eligible Australians.

If you value the experience of experts in other aspects of your life, don’t discount it when it comes to your financial well-being, including your super.

Everyone’s situation is different and depending on your stage of life, retirement plans and other specific goals, you may want to contact us today of you have any questions.

Things to consider

Downsizer contributions aren’t tax deductible and may affect your Age Pension eligibility through the assets and/or income tests.

There is no upper age limit when making a downsizer contribution nor are you limited based on your existing superannuation savings.

The money will count towards your total super balance which may affect your ability to make future super contributions. It will also count towards your transfer balance cap if you use it to start a retirement income stream.

You should take into account any costs associated with your selling your home (and buying a new one if you choose to do so). There may also be stamp duty payable on your downsized home purchase, if you choose to purchase a new property.

You can read more regarding the eligibility conditions on the Australian Taxation Office (ATO) website.

How do I make a downsizer contribution?

You will need to complete the downsizer contribution form on the ATO website. This form must be provided to your super fund before or at the time the contribution is made. Any downsizer contributions generally must be made within 90 days of the sale of your home, which is usually the settlement date.

You may be eligible for an extension from the ATO to make a downsizer contribution. Before granting the extension, the ATO will consider the circumstances causing the delay that are outside of your control.

Call us today to find out more on [phone]. 

* Since 1 January 2023, the age reduced from 60 to 55.

Important information and disclaimer

This article has been prepared by NULIS Nominees (Australia) Limited ABN 80 008 515 633 AFSL 236465 (NULIS) as trustee of the MLC Super Fund ABN 70 732 426 024. NULIS is part of the group of companies comprising Insignia Financial Ltd ABN 49 100 103 722 and its related bodies corporate (‘Insignia Financial Group’). The information in this article is current as at January 2023 and may be subject to change. This information may constitute general advice. The information in this article is general in nature and does not take into account your personal objectives, financial situation or needs. You should consider obtaining independent advice before making any financial decisions based on this information. You should not rely on this article to determine your personal tax obligations. Please consult a registered tax agent for this purpose. Opinions constitute our judgement at the time of issue. The case study examples (if any) provided in this article have been included for illustrative purposes only and should not be relied upon for decision making. Subject to terms implied by law and which cannot be excluded, neither NULIS nor any member of the Insignia Financial Group accept responsibility for any loss or liability incurred by you in respect of any error, omission or misrepresentation in the information in this communication.

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