Are you over 65 and considering selling your home?

New superannuation downsizer measures may allow you to contribute a portion of the sale proceeds from your home to a complying superannuation fund, provided certain requirements are met.

Historically it has been quite difficult for older Australians to contribute and increase their superannuation balances once they have retired due to having to satisfy a “work test” once attaining age 65.

However, one of the more welcome changes in this post-super reform era is the ability now to contribute up to $300,000 each (or $600,000 for a couple) of “downsizer contributions” into a complying superannuation fund without having to satisfy a work test.

The new “downsizer contribution” is excluded from the definition of a concessional and non-concessional contribution and therefore will not count towards the respective contribution caps.

Key eligibility requirements for the downsizer contribution are as follows:

  • the contributions must be made from the proceeds received from the sale of a property
  • contract to sell property must have been entered into after July 1 2018
  • you must be aged over 65 at the time the contribution is made
  • the contributions must be made within 90 days of settlement of the property
  • the property must have been owned by yourself or spouse for at least 10 years
  • the property must have been your main residence at some point during that period and qualified for the main residence CGT exemption in part or in full
  • your superannuation fund must be notified of the contribution in the approved form immediately prior to or at the time the contribution is made
  • the maximum amount of the contributions is the lesser of either $300,000, or the proceeds from the sale of the property

Do you think you may be eligible?

It is important you obtain the right advice as you may not necessarily have to “downsize” or purchase another property to be eligible to make a downsizer contribution.

To find out more please contact Davidsons for specialist advice on your eligibility to take advantage of the new superannuation downsizer measures. You can contact Simon Abbott on (03) 5244 6867 or by sending an email to simona@davidsons.com.au

In addition to providing you with information on the super downsizer measures, Davidsons Specialist SMSF team can also assist you with:

  • resolving any ATO regulatory and SIS compliance concerns your SMSF may encounter
  • assessing eligibility to commence a pension and/or access lump sum benefits from your SMSF
  • the tax implications of drawing pension and lump sum benefits from your SMSF
  • your SMSF succession strategy and working together with you (and your solicitor) to provide guidance on how your super assets may be distributed on death
  • the structuring options available for your next SMSF property purchase
  • what your SMSF trustee responsibilities entail (SMSFs are not for everyone).
  • assessing your eligibility to make contributions (concessional, non-concessional etc)
  • monitoring your annual contribution and pension limits

Please note the information in this article is general in nature and should not be considered advice.

Davidsons is not licensed to provide any financial product advice nor make any recommendations in respect of any financial product. Therefore we cannot recommend that you make a contribution to your superannuation fund. If you require such advice, you will need to consult a financial adviser who is licensed to provide financial product advice before you make a decision on a financial product.