Downsizing for the over 65s
Government proposals around improving housing affordability in Australia were passed through parliament and as part of the changes, Australians aged 65 and over will be able to contribute the proceeds from the sale of their main residence (up to $300,000) into super, while first-home buyers will be given a tax concession through the ability to save for a home deposit inside of super.
Super benefits for downsizers
From 1 July 2018 people aged 65 or over will be able to make an after-tax contribution to their super of up to $300,000 using the proceeds from the sale of their main residence – regardless of their work status, superannuation balance, or contribution history. For couples, both spouses will be able to take advantage of this opportunity, which means up to $600,000 per couple can be contributed toward super.
The government said the aim is to encourage older Australians, where appropriate, to free up homes that no longer meet their needs and make room for younger growing families.
To qualify, the contracts for sale must be exchanged on or after 1 July 2018. The property that’s sold also needs to have been your (or your spouse’s) main place of residence at some point in time, and you need to have owned the home for at least 10 years.
‘Downsizing’ contributions are not tax deductible and can be made regardless of super caps and restrictions that otherwise apply when making super contributions. The property that's sold must be in Australia and excludes caravans, mobile homes and houseboats.
Speak to one of our recommended Financial Advisors for more information as additional rules may apply to your situation, so make sure you do your research before making any decisions.
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