Anyone over 55 will be able to make downsizer super contributions if tax amendments introduced to Parliament last week are passed
The reduced age limit, proposed by the Coalition during the election, will widen eligibility for the scheme by a decade in a matter of months, with a reduction to 60 only in place from July.
“This will allow more Australians to make a one-off post-tax contribution of up to $300,000 per person when they sell their family home,” Assistant Treasurer Stephen Jones said last week.
“This measure will increase the availability of suitable housing for growing Australian families by encouraging more older Australians to downsize to homes that better meet their needs. ... “And if you’ve already reached contribution caps and maxed out on total super balance and all those other sorts of things, it does allow you to get more money into the system.”
Eligibility
- To be eligible, the home must have been owned for at least 10 years, be exempt or partially exempt from CGT under the main residence exception, and the money must be put into super within 90 days of settling the sale.
- Couples can contribute twice the $300,000 maximum amount but the scheme can be used only once.
ATO figures released last week showed the scheme is hugely popular, with contributions climbing to $10 billion prior to July. More than 41,000 Australians have now sold their homes and made downsizer contributions, according to the ATO.
If the value of a person's super fund goes above $1.7 million and they sell their house again and they’re now 75, they could be permitted to make that contribution into super because it’s not subject to age, and it’s not subject to how much money you have in the fund
Super Downsizer Contributions strategies will be an option to watch develop over the next 5 years are more Australians enter retirement.
