Downsizer Contributions - depositing more money into super after turning 65
Downsizer contributions were introduced from 1 July 2018 to allow members who have attained the age of 65 or over to sell their main residence and make up to a $300,000 contribution to their superannuation fund or $600,000 for a couple.
Provided the eligibility criteria is satisfied, downsizer contributions are excluded from the Non-Concessional Contribution Cap and can still be made if you have a total super balance greater than $1.6 million. The contribution would form part of the members’ tax-free component held in the fund.
There is no maximum age limit of when the contribution can be made and there is no requirement to satisfy a work test. Downsizer contributions are only available where the contract of sale was exchanged on or after 1 July 2018 and must be made within 90 days of receiving the proceeds of the sale.
Are you eligible?
The first step the member needs to take is to confirm that the amount they wish to contribute will constitute eligible downsizer contribution. An eligible downsizer contribution is where:
- the contribution is made to a complying superannuation fund by a member aged 65 years or older,
- the amount is equal to all or part of the ‘capital proceeds’ received from the disposal of an ownership interest in a dwelling that qualifies as a main residence in Australia, under the downsizer provisions,
- the home is in Australia and is not a caravan, houseboat or other mobile home,
- the home has been held continuously for at least the last 10 years prior to sale. The ownership period is generally calculated from the date of settlement of purchase to the date of settlement of sale,
- the individual has not previously made a downsizer contribution from the sale of another dwelling, and
- the individual has given a notice to the superannuation fund (Downsizer contribution into Superannuation form) either before or at the time of making your downsizer contribution
If your home that was sold was only owned by one spouse, 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.
Multiple downsizer contributions can be made from the proceeds of a single sale, however, the total of all your contributions must not exceed $300,000 or the total proceeds of the sale less any other downsizer contributions that have been made by your spouse.
You may request an extension for making a downsizer contribution in some circumstances where the delay has been caused by factors that are out of your control. An extension of time should be requested before the 90-day period from the date of settlement has expired. If the extension was not requested in the 90-day time frame, an extension of time may be granted due to ill health, death in the family or moving house.