Downsizers can put home sale proceeds into superannuation

Downsizers can put home sale proceeds into superannuation

AUSTRALIANS who are 65 years or older and looking to downsize can now make a downsizer contribution to their superannuation of up to $300,000 from the proceeds of the sale of their home.

The initiative was announced in the 2017 Federal Budget and came into effect on July 1, 2018.

To be eligible, downsizers must meet certain criteria, including:

n They or their spouse dispose of an ‘ownership interest’ in a qualifying home in Australia. A qualifying home is a residential building and does not include a caravan, houseboat or other mobile home.

– They exchange contracts for the sale of the home on or after July 1, 2018.

– They are aged 65 years or older at the time the contribution is made. There is no maximum age limit.

– The contribution is equal to all or part of the total capital proceeds from the disposal.

– The contribution must have been made within 90 days of disposing of the home or such longer time as allowed by the Australian Tax Office.

– They or their spouse, or former spouse, must have owned the home, or the land on which the home was situated, for 10 years prior to disposal.

– They meet the main residence requirement.

– They make a choice to treat the contribution as a downsizer contribution and notify the complying superannuation plan provider in the approved form at or before the time they make the contribution.

Downsizers are not required to purchase another home after the sale of their home to be eligible to make a downsizer contribution.

For more information, visit www.ato.gov.au.