Are you thinking of downsizing your home? Would like to contribute any excess cash from the sale of your home into super? The new downsizing contributions may be for you.
In an attempt to assist housing affordability, the government is giving older Australians considering downsizing their main residence, an incentive to put this money into super.
From 1 July 2018, taxpayers over 65 years old who want to deposit additional money into super may be able to use the new downsizing contribution rules. To be eligible to use the downsizer contribution rules, the following apply:
- the super contribution is made to a complying super fund by a member aged 65 years or older;
- the contribution is equal to all or part of the sales proceeds received from the sale of your home. Your home must qualify as a main residence in Australia,
- the member or the member’s spouse had an interest in the main residence before the disposal;
- the interest in the main residence was held by:
- the member;
- the member’s spouse;
- the member’s former spouse;
- You have not previously made any downsizer contributions into super.
Upon the sale of a main residence you can make up to a maximum of $300,000 in contributions to your super fund. Further, there is no age limit or gainful employment test that needs to be satisfied (however you will need to check your trust deed allows these contributions). These contributions are not counted towards your contributions caps.
Once you sell your main residence, you are required to make the downsizer contributions to your super fund within 90 days after the day the ownership changed.
If you are thinking about downsizing your home, talk to us to see if you qualify for the above and the processes involved.