Substantially boost your super with a downsizer contribution
If you’re 65 or over and thinking of downsizing to a smaller home, then it’s likely you’ve identified the benefits of unlocking a substantial financial sum from the sale of your home.
From 1 July 2018 - if you meet the eligibility requirements - you can give your super a huge boost by making a ‘downsizer contribution’ of up to $300,000 from the proceeds of the sale.
And if you and your partner both have an ownership interest in your home, then you can contribute a maximum $600,000 as a couple (that is, $300,000 each).
The contribution amount is not to be greater than the total proceeds of the sale of the property.
Do you need to buy another home to be eligible?
If you sell your home, if you’re eligible, and if you choose to make a downsizer contribution, then there’s no requirement for you to purchase another home.
How does this affect your personal contribution limits?
Your downsizer contribution would not be considered an after-tax contribution and so would not count towards your contributions cap. The downsizer contribution can still be made even if you have a total super balance greater than $1.6 million.
- You can only make downsizing contributions for the sale of one home. You can't access it again for the sale of a second home.
- This contribution will not affect your total super balance until it is re-calculated to include all your contributions, including your downsizer contributions, on 30 June at the end of the financial year.
- This 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.
- Downsizer contributions are not tax deductible and will be taken into account for determining eligibility for the age pension.