You’ll soon be able to release money locked up in your home to boost your super balance and increase your income in retirement.

If you sell^1 your primary residence on or after 1 July 2018, you may be able to make a ‘downsizer contribution’ to your super of up to $300,000 from the sale. You must be age 65 or over when you make the contribution. While your downsizer contribution will be a non-concessional contribution, it won’t count towards your contribution cap.

Also, provided you are over 65, you can make this contribution even if you are not working or would otherwise fail the work test.

If you have a partner, you can both take advantage of this measure, which means together, you could contribute up to $600,000 to super.

Although it’s known as a downsizer contribution, you don’t have to buy a smaller house or even purchase another property.

Am I eligible to make a ‘downsizer contribution’?

  • You must be 65 or older at the time you make a downsizer contribution. 
  • You must not have previously made a downsizer contribution to your super from the sale of another home.
  • You or your spouse must own your home for 10 years or more prior to the sale.
  • The capital gain or loss from the sale of your home must be either exempt or partially exempt
  • from capital gains tax (CGT) under the main residence exemption (or would be entitled to such an exemption).
  • Your home must be in Australia and it cannot be a caravan, houseboat or other mobile home.

How do I make the contribution?

  • If you decide to make a downsizer contribution, you must complete a form either before or at the time of making your contribution. This form will be available on the ATO website from 1 July.
  • You must make your downsizer contribution within 90 days of receiving your sale proceeds. 
  • Your downsizer contribution will count towards your total super balance and transfer balance cap, currently set at $1.6 million. This cap only applies when you move your super savings into retirement phase.
  • Any downsizer contributions you make will be counted for the assets and income test applied by Centrelink so they could affect your eligibility for the age pension.

We’re here with the right support and advice

Before making any decisions, it’s important to know your options.

Our financial planners can explain how you could make the most of the downsizer contribution by taking an all-inclusive view of your personal situation. They can help you make the right decisions for your circumstances and put a strategy in place that aligns with your financial goals.

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  1. For the purpose of a ‘downsizer’ contribution, ‘sell’ means an exchange of contracts, not settlement.