Treasury has released draft legislation to implement the 2017–2018 Federal Budget announcement to allow people 65 or over to make additional non-concessional contributions up to $300,000 from the proceeds of selling their home from 1 July 2018. The measure will apply to capital proceeds received from the disposal of an ownership interest in a dwelling that is a main residence for CGT purposes and has been held, either by the individual or their spouse, for a minimum of ten years.
The downsizer contribution cap of $300,000 will be in addition to the existing caps. It will also be exempt from the contribution rules for people 65 and older and the restrictions on non-concessional contributions for people with total superannuation balances above $1.6 million.
The downsizer contribution must come from the capital proceeds of the sale price. For example, if a couple sells their home for $500,000, their combined downsizer contributions are limited to $500,000 (in any combination, but no more than $300,000 for either of them). If an individual sells a home for $250,000, the downsizer contribution is limited to $250,000.
The contribution must be made within 90 days after the home changes ownership.
While the family home is totally exempt from the age pension assets test, any sale proceeds contributed to superannuation will count toward the assets test.