The downsizer super contribution rules introduced by the Government were one of a number of measures introduced to help reduce pressure on housing affordability. But it can also help people top up their ability to live more comfortably and affordably.
From 1 July 2018, individuals over 65 years of age may be eligible to contribute to super up to $300,000 from the proceeds of selling their home. Keep in mind that this only applies to contracts of sale entered into after 1 July 2018 and to see us for a professional SMSF advice before you do anything, but you can find out more below.
Who is eligible to make a downsizer contribution?
Prior to depositing an amount to their super fund, the individual should confirm they meet the eligibility requirements to make a downsizer contribution. These requirements include:
- The Individual is over 65 when the contribution is made to a complying superannuation fund;
- The contribution is equal to all, or part of the capital proceeds from the disposal of a property;
- The property was held by the individual or the individual’s spouse prior to the sale;
- Any capital gain or loss made on disposal will either be fully or partially exempt under section 118-B main residence exemption or would have been if the individual had acquired the property after 20 September 1985;
- The interest in the main residence was held by the individual, their spouse or their former spouse for 10 years prior to the disposal;
- The property is located in Australia and is not a caravan, houseboat or mobile home.
- The individual has not previously made a downsizer contribution*;
- The maximum amount of the contribution is the lesser of either $300,000 or the proceeds from the sale of the property.
You can even maximise your investment as an individual can make multiple downsizer contributions in relation to the sale of the same residence, provided the total amount of downsizer contributions for the individual does not exceed $300,000.
If you’re looking for SMSF advice, we can help. Book in now to see if an SMSF if the right fit for you.