If you are aged 65 years or older, you are currently able to make downsizer contributions of up to $300,000 into your superannuation fund from the sale of your main residence (as of 1 July 2018).
The Federal Budget recently announced that the age limit for downsizer contribution payments will be reduced from 65 to 60 once the relevant legislation has been passed.
This means that you can increase your super fund’s balance without impacting on your contribution caps (as it is not a non-concessional contribution), and this contribution can still be made even if your superannuation balance exceeds $1.6 million. It does however count towards your transfer balance cap, which is currently set at $1.6 million (increasing to $1.7 million for most people on 1 July 2021).
The downsizer contributions scheme can only be accessed once, so it can only apply when you sell or dispose of one home, including selling a part interest in a home. It is a one-time deal essentially and is not a tax-deductible amount.
You can however make multiple downsizer contributions from the proceeds of a single sale, but the total of the contributions cannot exceed $300,000 less than any other downsizer contributions that you have made.
You and your spouse can (in certain circumstances) both make downsizer contributions from the sale of the home even if the house was only owned by one of you, provided you both meet all the requirements.
These contributions will also come into account for determining whether or not you are eligible to receive the age pension.
If you would like more information on how to proceed with downsizer contributions, are looking to sell your home and wanting to continue with downsizer contributions from the sale, or just looking for guidance, we can help. Come speak with us.