More and more older Australians are seeing the benefits of selling the family home in favour of a smaller home, or even an apartment. To facilitate this, generous financial incentives have been available since 1 July 2018 for those who are ready to downsize.

If you sign a contract to sell your home or part of your ownership interest in it and you meet the eligibility requirements, you may be able to make a contribution of up to $300,000 to super from the proceeds of the sale. Couples may be able to contribute up to $600,000 from the sale proceeds into their super ($300,000 per person).  You must make the contribution within 90 days of the change of ownership unless you have been granted an extension.

Downsizer contributions will not count towards your concessional or non-concessional superannuation contribution caps. The downsizer contribution can still be made regardless of your total super balance. However, when your total super balance is re-calculated at the end of the financial year, your downsizer contribution amount will count towards your total super balance.

If you are considering making a downsizer contribution, you may wish to seek financial advice as downsizer contributions will count as an asset for the age pension assets test.

You should also:

• check that you meet all of the eligibility conditions listed on the ATO website
• contact your super fund to check that they accept downsizer contributions
• provide your fund with the Downsizer contribution into superannuation form either before or at the same time as you make your contribution. If you don’t, your fund may not be able to accept your contribution as a downsizer contribution.

More information about the downsizer contribution scheme from the Australian Taxation Office.