What are downsizer contributions?

Sometimes you just have a little more room than you need. Maybe your kids have all left home, you want to save money on bills, or time on housework – don't we all. Or, you might just want some extra cash for your retirement years.

The good news is, once you turn 55, you can add up to $300,000 as a single person, or $600,000 as a couple, into your super account from the sale of your home. This contribution does NOT count towards any of your contribution caps, and you won’t pay any contributions tax. Win-win!

How could a downsizer contribution benefit you?

A SUPER boost to your retirement savings

There’s no upper age limit, or work test for this type of contribution

You don’t need to buy another home

There is no contribution tax

What’s the catch?

Well, there isn’t one! But there are some things to consider before you decide it’s right for you.

First, let's talk eligibility requirements. To make this contribution, you must make sure that:

you’re 55 or older
you make your downsizer contribution within 90 days of the sale of your home
your home is in Australia, and you (or your spouse) have owned it for at least 10 years
your home is not a caravan, houseboat, or mobile home
your home is fully or partially exempt from capital gains tax
you haven’t already made a downsizer contribution to your super

If you want to look into the full eligibility criteria, head over to the ATO website.

Now, there are some other important things to consider:

Selling your home could reduce the amount of Age Pension you’re entitled to. Your family home isn’t counted under the means-test for the pension, but everything else you own, including your super, is.
Downsizer contributions are counted towards your transfer balance cap, which is currently $1.9 million.
If your downsizer contribution puts your super balance over your transfer balance cap, you generally won’t be able to make any after-tax contributions in the future.

So, before you decide if this is right for you, it’s a good idea to speak to a financial adviser about how this could affect your retirement.

How to make a downsizer contribution

So, you’ve decided making a downsizer contribution is for you, now what? Making the contribution is SUPER simple. Once you’ve sold your home, just follow the steps below.

Step 1: Download and complete the Downsizer contribution form.
Step 2: Send the form to us before or alongside making your contribution.
Step 3: Pay your contribution by BPAY® or electronic funds transfer.

® Registered to BPAY Pty Ltd ABN 69 079 137 518.

All information is general and does not take account of your personal objectives, financial situation or needs. Before deciding whether this information is appropriate for you, please consider speaking with a smartCoach or a financial adviser.

This material has been prepared for informational purposes only. Any taxation, legal and other matters, including any interpretation of existing laws, referred to in this material is not intended to represent or be a substitute for specific taxation or legal advice and should not be relied on as such. You should obtain professional advice from a registered tax agent or legal practitioner. Existing laws may change from time to time. Information updated Oct 2024.