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Summary

As part of the 2017-2018 Budget, the Governement announced the downsizer package to reduce pressure on housing affordability in Australia. From 1 July 2018, if you are 65 years old or older and meet the eligibility requirements, you may be able to choose to make a downsizer contribution into your superannuation of up to $300,000 from the proceeds of selling your home.

Content

As part of the 2017-2018 Budget, the Government announced the downsizer package to reduce pressure on housing affordability in Australia.

From 1 July 2018, if you are 65 years old or older and meet the eligibility requirements, you may be able to choose to make a downsizer contribution into your superannuation of up to $300,000 from the proceeds of selling your home.

So, why would this be beneficial for you? Moving this contribution into a super fund means that the tax rate will sit at 15%, which may be lower than your current tax rate. If you have the ability to move your super into a pension, these earnings may then be tax free.

* You will be eligible for the downsizer measure if all of the following apply:

  • You are 65 years plus at the time you make a downsizer contribution
  • The amount you contribute is from the proceeds of selling your home where the contract of sale exchanged on or after the 1st of July 2018
  • Your home was owned by you or your spouse for 10 years or more prior to the sale – the ownership period is generally calculated from the date of settlement of purchase to the date of settlement of sale
  • Your home is in Australia and is not a caravan, houseboat or other mobile home
  • The proceeds (capital gains or loss) from the sale of the home are either exempt or partially exempt from capital gains tax (CGT) under the main residence exemption, or would be entitled to such an exemption if the home was a CGT rather than a pre-CGT (acquired before 20 September 1985) asset
  • You have provided your super fund with the “Downsizer Contribution into super” form either before or at the time of making your downsizer contribution
  • You make your downsizer contribution within 90 days of receiving the proceeds of sale, which is usually at the date of settlement
  • You have not previously made a downsizer contribution to your super from the sale of another home

If you have any questions about the downsizer measure or how Infocus can help you, please touch base with our office.