Downsizer contribution FAQ | Wilson & Assoc Chartered Accountants

Frequently Asked Questions on Downsizer Contribution

What is a downsizer contribution?

Downsizer contribution allows eligible homeowners over 60 years of age to transfer up to $300,000 from the sale of their primary residence, into their super account without it affecting their contribution caps or limits. It can only be done once, but there’s no upper age limit for when you can make the contribution.

What are the benefits?

The main benefits of the downsizer contribution are that:

•   It allows you to add to your super balance at any time, even after you’ve retired

•   It’s not included in your contribution caps, so you may still be able to make further contributions over and above the $300,000 downsizer contribution limit

•   You can be any age above 60 years

•   It is not counted as part of your super balance until the end of the financial year

•   Joint owners can each contribute $300,000 to their individual super accounts

Even if s/he is not on the title, a spouse can make a downsizer contribution as long as they fulfil all the other criteria.

What are the contribution cap criteria?

The downsizer contribution rules require that:

•   You must be over 60 years of age

•   The property is an actual building (i.e. not a caravan)

•   The property must be in Australia

•   You must have owned it for at least 10 years

•   It was your primary residence (i.e. exempt or partially exempt from Capital Gains Tax)

•   You make the contribution within 90 days of receiving the money from the sale

•   It is your first and only downsizer contribution

You must complete the Downsizer contribution into super form and make sure the contribution form is with your super fund either before or when you make the contribution.

When can you make Downsizer contributions?

From 1 July 2022, the age from which you can make a downsizer contribution was lowered from 65 years to 60 years. There is still no maximum age, and the most you can contribute remains at $300,000 for singles and $600,000 for couples.

Source: Industry Super

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Disclcaimer: The information provided within this article is general information only.  None of the comments in these notes are intended to be advice, whether legal, financial product or professional. You should obtain specific advice regarding your particular circumstances from a tax or legal professional.

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