Top up your super with house proceeds

The Federal Government announced a package of reforms in the 2017-18 Budget to help reduce pressure on housing affordability in Australia, including contributing the proceeds of downsizing into super.

As of 1 July 2018, individuals aged 65 years or older, who meet eligibility requirements, may be able to make a downsizer contribution into their superannuation of up to $300,000 (or $600,000 per couple) from the proceeds of selling their home. 

Downsizer contributions aren’t considered a non-concessional contribution, and therefore will not count towards contributions caps. In fact, downsizer contributions can still be made even if the total super balance is greater than $1.6 million.

However, there are some conditions. Individuals can make multiple downsizer contributions from the proceeds of a single sale, but they cannot exceed $300,000 and must be made within 90 days of receiving the proceeds of sale – usually the date of settlement.

In some circumstances, individuals can request a longer period for making downsizer contributions – for example, where a delay has been cause by factors outside of their control, such as illness, death in the family or moving house.

Depending on the individual’s financial circumstances, there are benefits to consider by making a downsizing contribution. 

Under current super contribution rules, there are limited opportunities and amount restrictions for individuals aged 65-74 years old.  Therefore, by selling the home and contributing the sale proceeds, individuals are able to top-up their super by a considerable amount.

Secondly, downsizer contributions do not count towards concessional or non-concessional super contribution caps, and can be made regardless of the total super balance. 

At AMD, we’re happy to sit down and discuss downsizing contributions and any other superannuation questions you may have. 

Simply contact our Superannuation team to make an appointment so that we can help secure your financial future.