Downsizer Contributions To Super

It is generally required to make voluntary super contributions and people aged 75 and over cannot make voluntary contributions to their super. Yet in both situations, the downsizer contribution can now be made to top-up retirement savings.

Available to both members of a couple

Up to $600,000 per couple can be contributed if both spouses make use of the downsizer contribution.

Free from $1.6 million total super balance limitations

When your total super balance reaches $1.6 million or above as at 30 June of the previous financial year, you can no longer make voluntary contributions in the current financial year however this rule does not apply to downsizer contributions.

New home purchase is not required

You can make a downsizer contribution without purchasing a new home with the profits you receive from the sale.

Tax free income stream

Everyone is entitled to convert $1.6 million of their superannuation into pensions where earnings are subject to tax rate of 0%. Provided you have available cap space, you will be able to convert some or all of your downsizer contributions into a tax-free income stream to supplement your retirement income.

Key considerations

You are eligible to make a downsizer contribution to super if:

  • At the time of contribution, you are 65 and over.
  • The contribution is in relation to the sale of an eligible property that you or your spouse owned just prior to the sale, and where the contract of sale was entered into on or after 1 July 2018.
  • The total amount of downsizer contributions in respect of an eligible property does not exceed the sales profit, or $300,000 per person.
  • The contribution is made within 90 days after the change of ownership of the property (usually the settlement date).
  • The contribution is made using ATO’s approved form.
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