Updated May 2025 

If you’re aged 55 or over and planning to sell your home, you may be eligible to make a downsizer contribution of up to $300,000 to your superannuation fund. This special type of contribution allows older Australians to boost their retirement savings from the proceeds of selling their home without being subject to the usual super contribution restrictions. 

In this article, we break down the downsizer contribution rules, eligibility requirements and benefits so you can better understand this strategy and how it might form part of your retirement planning.  

What’s a downsizer contribution? 

Historically, legislation and restrictions have made it quite difficult for older Australians to top up their superannuation balances.   

A downsizer contribution presents a welcome opportunity. Eligible Australians can contribute up to $300,000 from the proceeds of selling their home to their superannuation fund. This means a potential combined contribution of up to $600,000 for couples. 

Here are some of the key features of downsizer contributions: 

  • They don’t count towards your concessional or non-concessional contribution caps.  
  • They’re not subject to the total superannuation balance limit (currently $1.9 million).  
  • There’s no upper age limit for making these contributions.  
  • You don’t need to meet a work test to be eligible.  

From 1 January 2023, the minimum age for downsizer contributions was lowered from 60 to 55, making this opportunity available to more Australians. 

Downsizer contribution eligibility: Who can make these contributions? 

To be eligible to make a downsizer super contribution, you must meet all of the following criteria: 

  • Be aged 55 years or older at the time the contribution is made 
  • The contribution must come from the proceeds of selling your home in Australia 
  • The home you sell can’t be a caravan, houseboat or other type of mobile home  
  • You or your spouse must have owned the home for at least 10 continuous years before the sale 
  • The home must have been your main residence at some point during ownership and qualified for the main residence capital gains tax exemption (in part or in full) 
  • You must make the contribution within 90 days of receiving the proceeds of the sale (usually from the settlement date)   
  • You must notify your super fund (using the approved form) that the contribution is a downsizer contribution immediately prior to or at the time that you make the contribution 
  • The maximum amount of the contributions is the lesser of either $300,000 or the proceeds from the sale of the property 
  • You haven’t previously made a downsizer contribution from selling another home.  

How much can you contribute under the downsizer contribution rules? 

The downsizer contribution limits are: 

  • Up to $300,000 per eligible person 
  • For couples, each person can contribute up to $300,000 (potentially $600,000 combined) 
  • The maximum contribution amount cannot exceed the proceeds from the sale of your home 

For example, if you sell your home for $900,000, you could contribute up to $300,000 to your super as a downsizer contribution. If you’re part of a couple, you could contribute up to $600,000 combined from the same property sale. 

If your home sells for $500,000, a couple could each contribute $250,000 (totaling the full proceeds). They also have the option to split the contribution, for example, $300,000 for one partner and $200,000 for the other.   

Benefits of making a downsizer contribution to your super 

There are several potential benefits to making a downsizer contribution: 

  • Increase your retirement savings: This is an opportunity to boost your super balance regardless of your current balance or whether you’re still working. 
  • Bypass the usual contribution restrictions: Downsizer contributions aren’t subject to the usual contribution caps, age limits or work test requirements that typically restrict older Australians from adding to their super. 
  • Tax advantages: Money in the superannuation environment is typically taxed at lower rates than personal investments. Once you convert your super to a retirement phase pension, earnings within your fund become tax-free. 
  • Flexibility to manage proceeds from home sale: You don’t have to contribute the entire proceeds – you can decide how much to contribute up to the $300,000 limit per person. 

Common questions about downsizer contributions 

Do I actually need to downsize my home to make a downsizer contribution? 

No, despite the name, you don’t need to buy a smaller property or even purchase another one. You simply need to sell your home and meet the eligibility criteria. 

Will a downsizer contribution affect my age pension? 

Possibly. While your principal home is exempt from the age pension assets test, money in superannuation is not exempt. Moving value from your exempt home to your assessable super could impact pension eligibility or payment rates.  

What if my home was owned in only one spouse’s name? 

Even if only one spouse is on the home’s title, both members of a couple may be eligible to make downsizer contributions. The spouse not on the title must meet all other eligibility requirements. 

Can I make multiple downsizer contributions from the same home sale? 

Yes, you can make multiple contributions as long as the total doesn’t exceed your $300,000 limit and all contributions are made within 90 days of settlement. 

How Davidsons can assist with your downsizer contribution and other SMSF needs 

At Davidsons, our specialist SMSF team can provide expert guidance on downsizer contributions and many other aspects of superannuation management, including: 

  • Assessing your eligibility to make a downsizer contribution, commence a pension and/or access lump sum benefits from your SMSF and help you understand the tax implications and benefits of the options available to you 
  • Resolving any ATO regulatory and compliance concerns 
  • Developing your SMSF succession strategy 
  • Advising on structuring options for SMSF property purchases 
  • Assessing your eligibility to make other types of super contributions, including concessional and non-concessional contributions 
  • Monitoring your annual contribution and pension limits 

To find out more about superannuation downsizer contributions, please reach out to SMSF manager Simon Abbott on 03 5244 6867 or via email. 

This article was written by SMSF manager Simon Abbott.   

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Disclaimer: The information provided in this article is factual in nature and objectively ascertainable and, therefore, does not constitute financial product advice. Importantly, the factual information that has been supplied does not take into account your personal circumstances, objectives or goals.