The Australian Government has introduced new laws regarding contributing the proceeds of downsizing into superannuation funds. This measure is part of a package of reforms to reduce housing affordability around the country.
From July 1st, individuals aged 65 or older will be able to make non-concessional (after tax) super contributions of up to $300,000 using proceeds from the sale of the family home. This limit will: > Apply on a per person basis > Be in addition to the ordinary non-concessional contribution cap and > Be available where the home has been owned for at least 10 years.
Contributions must be made within 90 days of settlement however extensions can be made in exceptional circumstances.
Unlike other non-concessional contributions, it will not be necessary to meet a work test or have a ‘total super balance’ under $1.6 million. However, the amount contributed will not be exempt from the assets test used to assess eligibility for the Age Pension.
Before you decide to make a downsizer contribution, you should check the eligibility requirements and contact your super fund to ensure they accept these contributions.