The Assistant Treasurer, Michael Sukkar, has announced that older Australians downsizing from their family homes have contributed $1 billion to their superannuation funds. He said key recent data shows:
- 4,246 individuals have utilised the downsizer measure;
- 55% of contributions have been made by females and 45% from males;
- individuals from every state and territory have made downsizer contributions with the top three states being, NSW (31%), Vic (26%) and Qld (24%).
The downsizer measure, which commenced on 1 July 2018, allows older Australians choosing to sell their home and downsize or move from homes that no longer meet their needs, to contribute the proceeds from the sale of their home into superannuation up to $300,000.
- From 1 July 2018, people who are 65 years old or older and who meet the eligibility requirements (see below), may be able to choose to make a downsizer contribution into their superannuation of up to $300,000 from the proceeds of selling their home.
- The downsizer contribution is not a non-concessional contribution and will not count towards their contributions caps. The downsizer contribution can still be made even if a person has a total super balance greater than $1.6 million.
- The downsizer contribution will not affect a person's total super balance until their total super balance is re-calculated to include all their contributions, including their downsizer contributions, on 30 June at the end of the financial year.
- The downsizer contribution will count towards a person's transfer balance cap, currently set at $1.6 million.
- A person can only make downsizing contributions for the sale of one home. They can't access it again for the sale of a second home.
- Downsizer contributions are not tax deductible and will be taken into account for determining eligibility for the Age Pension.
- If a person sells their home, is eligible and chooses to make a downsizer contribution, there is no requirement for them to purchase another home.
A person will be eligible to make a downsizer contribution to super if they can answer yes to all of the following:
- they are 65 years old or older at the time they make a downsizer contribution (there is no maximum age limit);
- the amount they are contributing is from the proceeds of selling their home where the contract of sale exchanged on or after 1 July 2018;
- their home was owned by them or their spouse for 10 years or more prior to the sale – the ownership period is generally calculated from the date of settlement of purchase to the date of settlement of sale;
- their home is in Australia and is not a caravan, houseboat or other mobile home;
- the proceeds (capital gain or loss) from the sale of the home are either exempt or partially exempt from CGT under the main residence exemption, or would be entitled to such an exemption if the home was a CGT rather than a pre-CGT (acquired before 20 September 1985) asset;
- the person has provided their super fund with the downsizer contribution into super form either before or at the time of making their downsizer contribution;
- the person makes their downsizer contribution within 90 days of receiving the proceeds of sale, which is usually at the date of settlement;
- the person has not previously made a downsizer contribution to their super from the sale of another home.