Downsizer contributions are contributions made to you super directly from the sale proceeds of your home. You can contribute up to $300,000 as an individual or $600,000 as a couple. To qualify for this contribution type, you must meet certain criteria, see ‘Who is eligible for a downsizer contribution’ below for more information.
It’s a good idea to double check that you meet all requirements before you contribute:
A downsizer contribution can help you boost your super later in life.
Check you meet eligibility rules first, and then:
1. Sell your home at (or after) 55 years of age
Decide how much of the proceeds you want to contribute (up to $300,000 per person, or $600,000 as a couple). The amount you contribute can’t exceed the proceeds you receive from selling your home.
2. Complete the form
Fill out the ATO’s Downsizer contribution form.
3. Make the contribution to your super account within 90 days of receiving the sale proceeds
Make your downsizer contribution to your super account within 90 days of receiving the sale proceeds. In some circumstances, you may be able to apply to the ATO for an extension.
Each person makes their contribution (up to $300,000 each) into their own super account. If you’re already eligible for a retirement account, you can then move it across. See which type of retirement account might work best for you.
Meet Abdul (62) and Holly (60). They put their family home of nearly 20 years on the market, to buy something smaller. They sell their home for $850,000 and decide to contribute $300,000 each – a total of $600,000 – from the sale proceeds into their super as a downsizer contribution.
Because they’re over 55 and meet all the eligibility rules, their contributions don’t count toward their concessional or non-concessional caps, so they’ve significantly boosted their super without paying any extra tax. And once they retire and start drawing a retirement income from their super, they’ll be able to access those funds tax free. Not only do they get more flexibility in retirement, but they’ve also made the most out of selling their home.
A downsizer contribution can affect your Age Pension eligibility because it moves money from your home (which isn’t included in the assets test) into your super (which is in the test). Depending on your overall assets and income, this may reduce, or even remove, your eligibility.
If you buy a new home, the value of it is generally not counted in these tests. It’s a good idea to get help or advice if you think making a downsizer contribution could affect your eligibility.
Downsizer contributions can be valuable, but there are a few important things to keep in mind:
You can only make downsizer contributions for a single property sale in your lifetime. After selling your home, you generally have 90 days to make any contributions to your super from the sale proceeds, up to a total of $300,000 (or $600,000 as a couple).
You might also decide to contribute one lump sum. It’s important to remember you can only make downsizer contributions for a single property sale in your life.
No, downsizer contributions can’t be claimed as a tax deduction. They’re treated as non-concessional, but unlike other non-concessional contributions they don’t count towards your annual cap, and don’t reduce your taxable income.
You must be 55 or older at the time you make a downsizer contribution. There’s no maximum age limit, so you can contribute at any age as long as you meet the other eligibility rules.
And unlike other voluntary contributions, you don’t need to meet the work test to qualify.
To make a downsizer contribution, first check that you’re eligible and your fund accepts them. Then complete the ATO form and give it to your fund before or at the time you contribute.
Generally, you must the contribution within 90 days of receiving the sale proceeds (you may be able to apply to the ATO for an extension in some circumstances).
Yes. You or your spouse must have owned the property for at least 10 years before the sale and you must have lived in it at some point. You don’t need to have lived there for the entire 10 years, but the home must qualify for the main residence exemption under CGT rules.
Yes, a downsizer contribution can affect your Age Pension. This is because it moves money from your home (which isn’t included in the assets test) into your super (which is in the test). Depending on your overall assets and income, this may reduce, or even remove, your eligibility. It’s best to seek financial advice before making a contribution.
As long as one of you meets the ownership and residency rules, both spouses may be able to contribute up to $300,000 each.
[AD2] Members can get advice about their Aware Super accounts at no extra cost, or advice on their broader needs for a fee.
