How it worksIf you're 65 years old or over and sell your primary residence after 1 July 2018, you may be eligible to contribute the proceeds into super. You may make contributions up to $300,000 for individuals or $600,000 for couples. Contributions made under the downsizing measure do not count towards existing contributions caps or any restrictions to voluntary contributions.
- you must be 65 years old or over.
- the house must be in Australia and cannot be a caravan, houseboat or mobile home.
- you or your spouse must have owned the residence for more than ten years.
To see a full list of eligibility criteria, visit the Australian Taxation Office (ATO) website.
You may make as many contributions as you wish, however the contributions can only ever be made from the proceeds of the sale of one dwelling. The amount you contribute cannot be greater than the caps listed above or the total proceeds of the sale of your home.
There is no restriction on making non-concessional contributions under the downsizing cap, even if you have over $1.6 million in your total super balance. However, if you have reached your $1.6 million transfer balance cap, these contributions must remain in the accumulation phase.
It is important to note that downsizer contributions will count towards your Age Pension assets test.
How to make a downsizer contribution
You must make a choice to treat a contribution as a downsizer contribution. The choice must be made in the approved form (to be supplied by the ATO from 1 July 2018) and given to TelstraSuper before or at the time the contribution is made. If you make multiple contributions, you must provide a form for each contribution.
All downsizer contributions must be made within 90 days of receiving the proceeds of sale. You may be eligible to apply to the ATO for an extension of time in some circumstances.
What should you do?
As with any financial decision, you should look at your own personal situation before taking action.
TelstraSuper Financial Planning has a team of phone based Advisers who can provide you with simple advice about your TelstraSuper account. You can contact them on 1300 033 166 or fill in the online contact form. There's no additional cost for our phone based advice as this is included in your TelstraSuper membership.