Ask your Aspen advisor:
“If we sell our home and downsize, can we use the downsizer rules to boost our super – and what conditions do we need to meet?”
For many Australians, the family home is their biggest asset. At some point, the large house in the suburbs becomes more work than it is worth, and the idea of a smaller place starts to look attractive.
The downsizer contribution rules are designed to help in exactly that moment – letting some of the sale proceeds move into super, where they can work harder for retirement.
How downsizer contributions work in simple terms
In broad terms, if you sell an eligible home and meet the conditions, you may be able to:
- Contribute up to $300,000 per person (so up to $600,000 for a couple) from the sale proceeds into super
- Make this contribution on top of the usual annual contribution caps
- Do it once in your lifetime, per person
The contribution does not count as a non-concessional contribution, but it is still subject to superannuation rules once inside the fund.
Key conditions people often miss
The detail matters, and there are a few common surprises:
- Minimum ownership period – generally, the home must have been owned for at least 10 years.
- Main residence status – the property needs to have been your main residence for at least part of that time (it does not need to be fully CGT-exempt, but the main residence exemption must apply to some part).
- Timing – you normally have 90 days from settlement to make the downsizer contribution.
- Age and timing changes – the minimum age has been lowered over time, so you need to check which threshold applies to you at the time of contribution.
On top of that, each person can only make a downsizer contribution once, so it is worth thinking ahead before you use it.
Things to think about before you commit
Before you rush to put a large chunk of house sale money into super, it is worth stepping back and looking at:
- Cash flow – how much ready access to cash will you need over the next 5–10 years?
- Centrelink – moving money from the home (which is exempt) into super and then into an income stream can affect age pension entitlements.
- Estate planning – will moving more wealth into super change how your estate passes to adult children or other beneficiaries?
- Investment mix – how will the extra super be invested, and does that line up with your risk comfort?
These are not reasons to avoid downsizer contributions, just reasons to plan properly.
Final thought
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