Super27 March 2018

Thinking of downsizing your home?


If you’ve been weighing up the pros and cons of downsizing, you might be interested to know that the Federal Government has introduced a measure to reduce pressure on housing affordability in Australia. It’s called the Contributing the proceeds of downsizing into superannuation measure. 

What’s the objective of the measure?

To encourage older Australians to downsize their home, if it no longer meets their needs, and to help free up housing for younger families, the measure will provide greater flexibility to contribute the proceeds from the sale of a family home to super in a tax friendly way.

Who’s eligible?

The measure will allow Australians aged 65 and over to make a non-concessional (after-tax) contribution into their super of up to $300,000 from the proceeds of selling their home.

The existing voluntary contribution rules for people aged 65 and older (work test for 65-74 year olds, no contributions for those aged 75 and over) and restrictions on non-concessional contributions for people with balances above $1.6 million, won’t apply to contributions made under this new downsizing cap.

How long must I have owned my home?

This measure will apply to the sale of a principal place of residence owned and lived in for a minimum of ten years.

Can my spouse contribute?

Both members of a couple will be able to take advantage of this measure for the same home, meaning a total of $600,000 for each couple can be contributed to super through the measure.

These new contributions will be in addition to any other voluntary contributions people are able to make under the existing contribution rules and concessional and non-concessional caps.

When does it commence?

The measure takes effect from 1 July 2018. You may only make a downsizing contribution using the proceeds of selling your home if the contract of sale is exchanged on or after 1 July 2018.

More information

See our Thinking of downsizing your home? factsheet 

Get advice

If you’re considering taking advantage of this measure, we strongly encourage you to seek expert advice. The rules around the measure are complex and it won’t work in everyone’s favour. For example, downsizing contributions will be counted for the assets and income tests used to determine eligibility for the Age Pension and Department of Veteran Affairs benefits, and the $1.6 million transfer balance cap will still apply to the amount which can be transferred to a pension account.

This article contains information or advice that is intended to be general in nature and which was prepared without taking into account your personal objectives, financial situation or needs. Because of that, before acting on any information or advice in this article, please consider whether it’s appropriate to your personal circumstances, talk to a financial planner and consider the relevant Member guide, available at or by calling 1800 005 166, before making a decision about whether to acquire the products.

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