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.