The introduction of the new Downsizer contributions generally now allows a contribution of $300,000 per member to be made to a superannuation fund on the disposal of a member's home that was their main residence, where this property has been owned for at least 10 years. 

The downsizer contribution can be used where the contract for the sale of the main residence property was entered into after the 1st July 2018. 

The Downsizer Contribution is a key way that members can increase their superannuation benefit post the age of 65 and can be extremely attractive for the following reasons: 

 

  • The Downsizer Contribution does not count towards the Concessional or Non Concessional Cap 
  • The Downsizer Contribution forms part of the ”Tax Free” Component 
  • The $1.6 Total Superannuation Balance Cap does not apply to the Downsizer Contribution, that is a member can still make a Downsizer Contribution even if their Total Superannuation Balance is in excess of $1.6 million 
  • A member is not required to satisfy the work test in order to make the downsizer contribution 
  • Although a member must be at least 65 years old in order to make the Downsizer Contribution there is no upper age limit, therefore a member can make a Downsizer Contribution post the age of 75

It is not that easy though, you must ensure compliance with the below conditions in order to ensure that the contribution is treated as a Downsizer contribution: 

  • Minimum age of 65 year old 
  • The amount of the contribution cannot exceed the members share of the total capital proceeds received on sale; 
  • The member or their spouse must have held the interest in the property in their own name/names; 
  • The property must have been owned for a minimum of 10 years; 
  • At least a portion of the capital gain must be exempt from Capital Gains Tax under the main residence exemption; 
  • The appropriate ATO form must be completed & provided to the Fund 
  • The Downsizer contribution can only be made in respect to one property, even if this is made via a number of transactions; 
  • If a Downsizer contribution is made in respect to a partial sale of a property, future Downsizer contributions cannot be made on any subsequent sales of the same property; 
  • The contribution must be made within 90 days of settlement date; 

Should the above apply to your circumstances please contact CSCG to discuss further.