Boosting Your Retirement with Downsizer Contributions: What You Need to Know

If you’re aged 55 or over and considering selling your family home, you may have a unique opportunity to boost your superannuation through what’s known as a downsizer contribution.

This measure aims to provide greater flexibility in retirement planning while encouraging better use of housing stock across the country.

Here’s what you need to know if you’re weighing up whether this strategy is right for you or a family member.

What Is a Downsizer Contribution?

A downsizer contribution allows eligible Australians aged 55 and over to contribute up to $300,000 from the sale of their main residence into their superannuation fund. For couples, this means a combined contribution of up to $600,000. Best of all, these contributions don’t count towards your concessional or non-concessional contribution caps.

Who Is Eligible?

To qualify for a downsizer contribution, you must meet the following conditions:

  • Age: You must be 55 years or older at the time of making the contribution.
  • Property: The home sold must have been your primary residence and owned by you or your spouse for at least 10 years.
  • Capital Gains Tax: The property must be eligible for full or partial exemption from capital gains tax under the main residence exemption.
  • Timing: You must make the contribution within 90 days of receiving the sale proceeds (generally settlement date).
  • Limit: You can contribute up to $300,000 per person (or $600,000 per couple), but only once—this isn’t a repeatable strategy.

What Are the Benefits?

  • Grow Your Super: This is a great opportunity to significantly boost your super balance without worrying about standard caps.
  • Tax Efficiency: Superannuation remains a highly tax-effective structure, especially in retirement.
  • Flexible Investing: Your contribution can be invested across a wide range of assets within your fund.
  • Estate Planning Tool: Consolidating funds into super may simplify your estate planning process.

Steps to Make a Downsizer Contribution

  1. Sell your eligible home – ensure it meets the required criteria.
  2. Complete the ATO downsizer contribution form.
  3. Submit the form to your super fund, either before or at the time of making the contribution.
  4. Make the contribution within 90 days of receiving the sale proceeds.

Important Considerations

While the benefits are significant, downsizer contributions can have implications:

  • Age Pension Eligibility: Once the proceeds are in your super fund, they count toward both the assets and income tests, which could impact your Centrelink entitlements.
  • Super Access: Depending on your age and retirement status, you may not have immediate access to the funds contributed.
  • Timing: The 90-day window is strict. Late contributions may be rejected, so planning is essential.

Let’s Talk About Your Options

Selling your home is a major financial decision, and downsizer contributions can be a smart way to turn that equity into a more secure retirement. But as with any super strategy, the fine print matters.

If you’re thinking about making a downsizer contribution, we’re here to help you assess eligibility, ensure compliance with ATO rules, and understand how it fits into your broader retirement plan.

Talk to us before you sell – let’s maximise the opportunity and minimise any surprises.

Disclaimer: This article contains general information only. Regrettably, no responsibility can be accepted for errors, omissions or possible misleading statements or for any action taken as a result of any material in this guide. It is not designed to be a substitute for professional advice, as such a brief guide cannot hope to cover all circumstances and conditions applying to the law as it relates to these items.

RECENT NEWS

CATEGORIES

AUTHOR

Sharee Webster

Sharee Webster BComm (UQ), CA, CTA, RTA, Dip FP

Sharee is the owner/director of the Holmans Maroochydore office. Sharee is a Chartered Accountant and holds a Bachelor of Commerce from the University of Queensland, a Chartered Tax Adviser from the Taxation Institute of Australia, a Registered Tax Agent and has a Diploma of Financial Planning.

Prior to returning to the Sunshine Coast and joining Holmans in 2007, Sharee was based in Sydney for almost 20 years where she progressed her career as a chartered accountant to holding positions in senior management and owner in an accounting practice.

With over 25 years as a chartered accountant, Sharee provides strategic accounting and tax advice and specialised business solutions including to suit a wide variety of private clients, owner-operated business, large corporate entities, and Self-Managed Super Funds.

Sharee is passionate about being part of the Sunshine Coast Community and about giving back to the community. In June 2017, Sharee was appointed to the Board of Be (formerly Comlink) Ltd, a large Not for Profit whose main office is located on the Sunshine Coast. Be provides Transport, Home Care and Community services across Queensland. She loves being involved with this organisation – whose goal is for all people to age well.

She was the Treasurer of the Sunshine Coast Business Women’s Network for 6 years stepping down in early 2018. As a Buderim local, she was on the Board of Directors of the Buderim Community Enterprises Limited, trading as the Buderim Community Bank ® Branch of Bendigo Bank for six years stepping down from that role in 2018 too.

Need assistance and want to know more?
Contact Holmans today;

Holmans Noosa: (07) 5430 7600 or email info@holmans.com.au
Holmans Maroochydore: (07) 5451 6888 or email infohm@holmans.com.au

“Holmans have been our accountants for nearly a decade and have always been wonderful to work with.”

Craving better service?

Start Today
Holmans - Client testimonial