Downsizing done right

How to contribute money from the sale of your family home into your super.

Thinking about having a smaller home to suit your lifestyle?

If you’re aged 55 or more, you can downsize your home, upsize your super and maximise potential tax savings along the way.

We show you how to contribute money from the sale of your family home into your super.

Garden outside apartment building

What is downsizing?

If you’re an empty nester who no longer needs a large family home, you might consider selling your property for something smaller.

The Australian Government has lowered the age eligibility to 55 to allow older Australians to invest up to $300,000 of the proceeds of their house sale into their super.

Downsizing can release built-up equity, increase cash flow, and pump up your retirement savings.

Learn more about What is downsizing?
  • How does a downsizer contribution give me tax savings?

    Super is a lower taxed environment, so saving money into your super gives you more of your money to invest.

    • When your super earns income, it pays tax on this income at a rate of up to 15% which is not impacted by your annual income.
    • When you earn income or investment earnings outside of super, it’s included in your annual tax return and taxed at your marginal tax rate.

    You may pay less tax on the investment income your super earns compared with your savings and investments outside of super if your marginal tax rate is higher than 15%.

  • Is there a downside?

    The downsizer contribution counts towards your total superannuation balance, and this may impact your contribution limits in future years.

    Downsizing can affect your eligibility for Age Pension.

    For information about Age Pension and asset value limits, visit Services Australia.

  • Who can apply

    Get to know the downsizer contribution rules to see if you meet the eligibility requirements . The big news is that from 1 January 2023 the eligibility was lowered from age 60 to age 55, and you can contribute up to $300,000 for singles and $600,000 for couples.

    Carefully consider the eligibility requirements to assist you in your decision making.

Am I eligible?

• You must be age 55 or older at the time you make your contribution.

• Your contribution must come from the sale of your main residence.

• Your property must be an actual building (e.g. not a caravan) and be in Australia.

• You must have owned your sold property for at least 10 years.

• Your sold property must have qualified as your main residence for capital gains tax exemption.

• You must make your contribution to your super fund within 90 days of the sale of your property.

• You cannot have made a previous downsizer contribution (i.e. this is your first and only downsizer contribution).

Five reasons to downsize

So why do it? Whether you’re retired or about to retire, this is a moment of opportunity. You could pay off your mortgage—if you still have one—and simplify your life.

 

Making a downsizer super contribution can give you more super savings.

How to make a downsizer contribution

You’ve sold your property, checked your eligibility and you’re ready to make a downsizer contribution!

  1. Let us know that you want to make a downsizer contribution before you take action. We’re here to support you through the process.

    Call PSSap on 1300 725 171 or ADF Super on 1300 203 439.

  2. Complete and return the two-page Downsizer contribution into superannuation form. You must complete and return this form BEFORE you make your downsizer contribution.

     

    Downsizer contribution into superannuation form

Note:

  • We must receive your downsizer contribution within 90 days of you receiving the proceeds of the sale of your property.
  • You cannot BPAY a downsizer contribution.

If your contribution doesn't meet the eligibility requirements (because the ATO advises us that you aren’t eligible, or because your contribution was received before your downsizer contribution election form), we will assess whether it can be accepted as a personal contribution.

If your contribution is accepted as a personal contribution, it will count towards your non-concessional contributions cap.

If your contribution can't be accepted, we will return it to you.

Want to know more?

We’re here to support you. Call PSSap on 1300 725 171 or ADF Super on 1300 203 439.

Want to know if a downsizer contribution will suit your circumstances? Book an appointment with one of our authorised Financial Planners* and create a plan for the retirement lifestyle you want to live. To get started, call 1300 277 777 or visit Financial Planning.

*Our authorised financial planners are authorised to provide advice by Guideway Financial Services (ABN 46 156 498 538, AFSL 420367). Guideway is a licensed financial services business providing CSC financial planners with support to provide members with specialist advice, education and strategies.

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