How to contribute money from the sale of my home into superannuation?

Published on 7 March 2019
Categories: Wealth

What is the downsizer contribution?

Since 1 July 2018 it is possible for eligible persons aged 65 or older to make a special “downsizer contribution” into their superannuation fund of up to $300,000!

If you are selling a home that you have owned for 10 years or more, then you should consider contributing some of the proceeds into superannuation to reap the benefits of super’s low tax rates on earnings and/or help reduce death tax.

The amount you can contribute is a maximum of $300,000 each. And you don’t even need to “downsize”.

The downsizer contribution does not count towards your ordinary contribution caps, and therefore can be a fabulous opportunity to top-up your superannuation.

Alternatively, the downsizer contribution can be an opportunity to reduce ‘death tax’ – tax that may be payable by your loved ones who receive money from your left over superannuation. If you’re unsure about this, give us a call.

There are specific rules about when a person is eligible to make a downsizer contribution. These rules broadly relate to your age, date of sale, whether your home qualifies for the main residence exemption, that your home is in Australia and is not a caravan, houseboat or mobile home, the timing of the contribution and completing a “downsizer contribution into super form”.

Also, you can only make downsizer contributions from the sale of one home – once you have sold your home and made a downsizer contribution, you won’t be able to do it again later on the sale of another home.

A number of our clients have taken advantage of the downsizer contribution. Call us today if you are interested in exploring this opportunity.