On 13 December 2017, the Government’s downsizing proposal was passed as law meaning that older Australians may be able to boost their retirement savings if they sell the family home.
The downsizing measure
From 1 July 2018, if you are over 65 years, you may be able to contribute up to $300,000 from the sale of your primary home to your super or income stream account.
This money is not counted towards your contribution limits nor affected by the total super balance test that financial year.
However, it will count towards your total super balance and total income stream transfer balance cap. The amount is included with any super balances for age pension calculations and is not tax deductible.
There is no requirement to by a smaller home, or any home for that matter, for this measure to apply, and it applies to an individual so a couple may be entitled to contribute $600,000 in total.
Eligibility is strictly set and there are timeframes for making the contributions. Amongst other criteria, money must come from the proceeds of your primary home (not a caravan or houseboat) that you and/or your spouse have owned for at least 10 years. The maximum you can contribute is the proceeds of a single sale, even if that amount is less than the $300,000 limit.
Please contact our Member Advice Team if you are considering selling your home so we can discuss if the downsizing measure suits your circumstances.