Downsizer Contributions permitted from 1 July 2018

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By Brett Griffiths

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On 7 December 2017, both houses of parliament passed the “Downsizer contributions” measure.

Essentially, from 1 July 2018, individuals aged 65 or over will be able to make a non-concessional contribution to their superannuation of up to $300,000 from the proceeds of selling their home.

These contributions will not count towards the non-concessional contribution cap and the individual making the contribution will not need to meet the existing maximum age, work or $1.6m balance tests that usually apply when someone aged 65 years or older make a contribution to super.

If the home is in joint names, both members of the couple can contribute to their superannuation, thereby allowing up to $600,000 to be contributed.

To qualify, the following conditions must be met:

  • The contract for the sale of the property has to be dated after 1 July 2018;
  • The property sold must have been owned by the individual (either solely or jointly) for the past ten or more years;
  • The property must have been the principal residence of the individual;
  • The contribution must be made within 90 days of the disposal;
  • The individual must choose to treat the contribution as a downsizer contribution, and notify their superannuation provider in the approved form of this choice at the time the contribution is made (noting that we do not yet have the “approved form”; and
  • The individual cannot have used the downsizer contributions measure in relation to an earlier disposal of a main residence.

 

If you would like to know more about downsizer contributions, please contact Brett Griffiths our Superannuation Advisory Director for assistance.

An Important Message

While every effort has been made to provide valuable, useful information in this publication, this firm and any related suppliers or associated companies accept no responsibility or any form of liability from reliance upon or use of its contents.  Any suggestions should be considered carefully within your own particular circumstances, as they are intended as general information only.

 

 

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