The Federal Government recently announced that, as of 1 July 2018, downsizers aged 65 years or older may opt to contribute proceeds from the sale of their home (up to a total of $300,000 each) toward their super fund(s). Referred to as a downsizer contribution, it is treated as being non-concessional; existing in addition to the current maximum annual non-concessional contribution of $100,000 each (or $300,000, pursuant to the bring-forward rule). Any downsizer contribution will, however, count towards an individual’s transfer balance cap, which is $1.6 million for the 2018-19 financial year.
Those eligible to make downsizer contributions must meet all the following specifications:
An individual who has made a downsizer contribution toward their super fund is not required to purchase a new home. Multiple downsizer contributions from the proceeds of a single sale are allowed, so long as they do not collectively exceed $300,000 per owner (or, the total proceeds of the sale less any other downsizer contributions made by a spouse). Careful consideration should be given to possible taxation, estate planning, and Centrelink implications.
For those wanting more information about this planning strategy and its eligibility requirements, please seek out professional financial advice from Ashfords Wealth Advisors.
DISCLAIMER: The above is general advice only.
(Sourced, Downsizing contributions into superannuation 29 Jun 2018, https://www.ato.gov.au/individuals/super/super-housing-measures/downsizing-contributions-into-superannuation/accessed 31 July 2018)