Downsizer Contributions Into Superannuation

There is an incentive for Members to add to super when downsizing their main residence. The Government introduced this incentive in the 2018 Budget.

Under this arrangement, Trustees over the age of 60 may be able to make a Downsizer contribution into their SMSF of up to$300,000 from the proceeds of selling their home.

Treatment of the downsizer contributions

The Downsizer contribution is neither a non-concessional contribution nor a concessional contribution. Therefore, it does not count towards either contribution caps. As it is not considered a non-concessional contribution, Members with a pension balance over $1.7 million may also be able to make downsizer contributions into the Fund.

However, the amount will still count towards the Member’s transfer balance cap. For more information on the Transfer Balance Cap, please see here:

Members do not need to meet the work test in order to make the downsizer contribution into super. This is good news for Members who are retired.

Eligibility for the downsizer contribution measure

Trustees may be eligible for the downsizer measures if all of the following conditions are met:

  • You are 60 years of age and over (from 1 July 2022) at the time of the contribution,
  • The amount that you are contributing is composed solely of the proceeds from selling your home,
  • Your home is owned by you or your partner for more than 10 years prior to sale,
  • Your home is located in Australia and is not a caravan, boat or other mobile homes,
  • Proceeds from the sale of your home are either exempt or partially exempt from Capital Gains Tax (CGT),
  • Downsizer contributions are made within 90 days of receiving the proceeds of the sale, which is generally at the date of settlement, and
  • You have not made a prior downsizer contribution from the sale of another home

If your home was only owned by one spouse and was sold, the spouse that did not have an ownership interest may also make a downsizer contribution, or have one made on their behalf, provided they meet all of the other requirements.

In order to be eligible, the contract of the sale of your home must be signed post 1 July 2018. For more guidance, please click on the button below:

In order to make the contributions, you must complete the Downsizer Contribution into Super Form. You can download a copy of the form here:

The downsizer contribution may be a way for Members who do not meet the work test to increase their retirement benefits. If you are between the age of 65 and 75 and you are able to meet the work test, you may be able to make the regular non-concessional contributions into the Fund. For more information on making non-concessional contributions, please see here:

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