WHAT DOES THIS MEAN?
From 1 January 2023, eligible individuals aged 55 years or older can choose to make a downsizer contribution into their super fund of up to $300,000 per person ($600,000 per couple) from the proceeds of selling their home. There are no changes to the remaining eligibility criteria.
KEY DATES FOR DOWNSIZER CONTRIBUTIONS
- Eligible individuals aged 55 years or older can make a downsizer contribution from 1 January 2023.
- For any downsizer contributions made between 1 July 2022 and 31 December 2022, eligible individuals must be aged 60 years or older at the time of making their contribution.
- Prior to 1 July 2022, the eligibility age was 65 years and over.
OTHER IMPORTANT INFORMATION TO CONSIDER FOR 55-59 YEAR OLDS
- Individuals have 90 days from receiving the sale proceeds of their home to make a downsizer contribution. This means if an individual receives the proceeds of sale prior to the 1 January 2023, they can make their contribution from 1 January 2023, so long as they are still making it within 90 days of receiving the proceeds.
- If 1 January 2023 falls outside of their 90-day window to make a downsizer contribution, they will not be eligible. It is unlikely the ATO would grant an extension of time in these circumstances.
HOW YOU WILL KNOW IF YOU ARE ELIGIBLE
If you can answer yes to all the following:
- You have reached the eligible age at the time you make a downsizer contribution; the eligible age to make a downsizer contribution is as follows
- From 1 January 2023, 55 years old or older
- From 1 July 2022, 60 years old or older
- From 1 July 2018, 65 years old or older
- Note: There is no maximum age limit.
- 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 gain 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 asset (acquired before 20 September 1985).
- You provide your super fund with the Downsizer contribution into super form (NAT 75073) 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 or from the part sale of your home.
Note: If your home was only owned by one spouse and was sold, the spouse that did not have an ownership interest may also make a downsizer contribution, or have one made on their behalf, provided they meet all of the other requirements.