From 1 January 2023, if you are 55 years or older, you may be able to contribute up to $300,000 from the proceeds of the sale of your home into your super.
Your spouse may also be able to do the same.
There are eligibility criteria that apply to making a Downsizer contribution. These include:
- You are at least 55 years old (from 1 January 2023)
- You and/or your spouse owned your home for 10 years or more before the sale. This is typically the time from settlement date when you bought it to settlement date when you sold it.
- Your home isn’t a caravan, houseboat or mobile home
- Your home is in Australia
- Any proceeds you make from the sale of your home are exempt or partially exempt from Capital Gains Tax under the ‘main residence exemption’
- You make the downsizer contribution to your super with 90 days of receiving the money (typically, this would be settlement date)
- You have not made a downsizer contribution at all before on this home or any other home
- You complete and lodge the Downsizer contribution into super form
Let ElectricSuper know
You need to complete the Downsizer Contribution Into Super Form before or at the time you make the downsizer contribution.
If you don’t let us know, using the form, that the contribution is a downsizer contribution, it will be counted as a non-concessional contribution and you could breach your annual caps, resulting in the money being very heavily taxed.
The Transfer Balance Cap
Even if you lodge the Downsizer Contribution Into Super Form with us, your downsizer contribution will still count towards your Transfer Balance Cap. The Transfer Balance Cap is the $1.9m* maximum amount that you can move into the retirement phase of super (such as an Income Stream).
If you have more than $1.9m* in your super when you retire, you may move up to $1.9m* into the retirement phase and leave the remainder in your current super account.
What if I didn’t own the home?
If the home was only owned by one of the spouses, the spouse that did not own the home may also make a downsizer contribution (as long as they meet all the other eligibility requirements).
Where can I get more information?
The ATO’s website has more information, including all the details of eligibility, case studies and examples. We strongly recommend that you seek financial advice in relation to Downsizer contributions for your situation. You can also watch the Downsizer video on our Videos page for more.
* Transfer Balance Cap is up to $1.9m in 2023/24. Find out more about the Transfer Balance Cap on the ATO website.