The downsizer contribution
Superannuation's best-kept secret gives you the opportunity to end up with more for your retirement after selling your home.
Unlock the power of compounding interest on your superannuation.
From 1 January 2023, the Australian Government lowered the eligible age for downsizer contributions to superannuation to 55 years. This change allows more Australians to boost their retirement savings earlier, taking advantage of compound interest.
If you're 55 or older, here’s what you need to know about making a downsizer contribution:
Contribution amount• You can use the proceeds from selling your home to make a one-off downsizer contribution of up to $300,000, or $600,000 per couple.
Tax benefits• This contribution is non-concessional, meaning it’s not subject to extra tax.
• It doesn’t count towards your annual contribution cap of $110,000.
• The downsizer contribution will not affect your total superannuation balance until it recalculates at the financial year’s end.
• However, it does count towards your transfer balance cap of $1.9 million, which is considered when moving your super savings into the retirement phase and determining eligibility for the age pension.
Important ConsiderationsIt’s advisable to seek independent financial advice, especially regarding the age pension asset tests.
The downsizer contribution is a government incentive that enables empty nesters to sell their larger homes with a significant added financial benefit and as a result, helping more housing stock become available
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