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Superannuation downsizer contributions age drops to 60 from 65, from 1st July 2022
Downsizer Contributions allow people planning for retirement to contribute proceeds from the sale of their home into superannuation to help fund their own super pensions.
The government passed a measure in Feb 2022 to reduce the eligibility age for making downsizer contributions from 65 to 60 years, which will come into effect from 1 July 2022 this year.
Downsizer contributions allow eligible individuals to make a contribution to their superannuation of up to $300,000 per person ($600,000 per couple) from the proceeds received from selling their home.
In order for a fund member to make these contributions, they must meet the eligibility criteria, which include the proceeds from the home being either exempt or partially exempt from Capital Gains Tax (CGT) under the main residence exemption.
Click here to learn more about the ATO’s guidelines on Downsizing contributions into superannuation.
We have put down a few most common queries related to Downsizer Contribution for your ready reference as follows:
How can I benefit from a downsizer contribution to super?
Downsizer contribution to your super is beneficial as you receive tax benefits on that amount.
How much can I contribute?
You can contribute a maximum amount of $300,000 or lesser if the sale price of your home is below $300,000. You may make more than one contribution, but the total must not exceed the maximum specified limit.
Can my spouse contribute?
Yes, you may each make a downsizer contribution, even if your spouse was not on the title of your home. But the combined value of your spouse’s contribution and your own cannot exceed your home’s sale price.
Does this affect my Transfer Balance Cap?
Downsizer contributions are exempt from contribution rules but they still count toward the $1.7 million transfer balance cap.
If you would like any further information on how to make downsizer contributions or any other matter, please feel free to book online.