Downsizer Contribution: A Win for Older Home Owners

older couple

Older Australians who sell their home after 1 July 2018 will be able to make a downsizer contribution into their superannuation fund if they meet all eligibility requirements.

Announced in the 2017-2018 budget and taking effect from 1 July 2018, homeowners over 65 who meet certain eligibility requirements may choose to make a ‘downsizer contribution’ to the maximum amount of $300,000  into their superannuation when they sell their home.

The downsizer contribution is a non-concessional contribution which will not count toward contribution cap, however, the contribution is not tax deductible and will be taken into account if applying for, or already receiving, the age pension. While a person can only make downsizing contributions from the sale of one home, there is no requirement for them to purchase another home which will be of benefit to those who are moving into aged care facilities or to live with relatives. However, those wanting to buy a new property can still do so.

To be eligible for the ‘downsizer’ measure you must be 65 years or older, have owned the home for a minimum of 10 years (mobile homes, caravans, houseboats are not eligible) and the contract of sale of the home was exchanged on or after 1 July 2018.

The downsizer contribution must be made within 90 days of receiving the proceeds of the sale and a downsizer contribution form must be filled out and given to your superannuation fund before, or at the time, of the deposit. The contribution can only be made from the sale of one home and cannot be greater than the total proceeds of the sale of your home, however, if you’re part of a couple each person can make a contribution of up to $300,000.

This article is intended to be a guide only. For full details and eligibility requirements please visit the ATO website and talk to your financial advisor before making any decisions about selling your property for the purpose of contributing to your superannuation fund. For information on how Noel Jones can help you sell your home contact your nearest office today.

Share:

More Posts

December market update

Vendors made up for lost time as we closed in on 2022, bouncing back strongly after months of uncertainty due to lockdowns and limits. Sellers listed in record numbers in the final months of 2021. Figures from Domain show newly advertised properties in Melbourne’s inner and outer eastern suburbs jumped by 54 and 50 per cent respectively in the year’s

November market update

Melbourne’s east is proving as coveted as ever, with Wantirna, Blackburn and Ringwood ranking among Melbourne’s 10 most liveable suburbs. The PwC Australia City-Pulse 2021 report rated Wantirna as Melbourne’s fourth best postcode, based on criteria such as access to transport and amenities, housing prices, job accessibility and open space. Wantirna South, Glen Iris and Camberwell also made the top

Seven tips for buying your first home

The hardest part of climbing the property ladder is often getting on that first rung. It’s equal parts exciting and overwhelming as you take that first step, and any uncertainty can be intensified by Melbourne’s fiery property market. While housing prices have jumped 15 percent in our city this year, there is still ample opportunity for first home buyers, with

The purpose of property appraisals – beyond selling

The emotional security of owning a home is priceless – but sometimes, you need to put a solid number on its value. Those moments are when you need a property appraisal, as an independent assessment of a property’s worth. Professional appraisals are an important part of buying or selling a house, as they can help determine how much you can

Send Us A Message