On 7 December 2017, both houses of parliament passed the “Downsizer contributions” measure which allows individuals aged 65 or over to make a non-concessional contribution to their superannuation of up to $300,000 from the proceeds of selling their home, after 1 July 2018.
These contributions will not count towards the non-concessional contribution cap and the individual making the contribution will not need to meet the existing maximum age, work or $1.6m balance tests that usually apply when someone aged 65 years or older make a contribution to their superannuation.
If the home is in joint names, both members of the couple can contribute to super, thereby allowing up to $600,000 to be contributed.
To qualify, the following conditions must be met:
- The contract for the sale of the property has to be dated after 1 July 2018;
- The property sold must have been owned by the individual (either solely or jointly) for the past ten or more years;
- The property must have been the principal residence of the individual;
- The contribution must be made within 90 days of the disposal;
- The individual must choose to treat the contribution as a downsizer contribution, and notify their superannuation provider in the approved form of this choice at the time the contribution is made (noting that we do not yet have the “approved form”); and
- The individual cannot have used the downsizer contributions measure in relation to an earlier disposal of a main residence