Question of the month: Am I eligible to make the downsizing contribution into my super?

By Mark Copsey, Director of Allworths Wealth Management

This month, we received a question about the eligibility of making the downsizer contribution to superannuation from the sale proceeds of the family home. In particular, if it can still be made if your super balance is more than $1.6 million.

It has been possible to make a contribution to your superannuation fund from the proceeds of your home since 1 July 2018, which can provide a great boost to your superannuation savings.

To be eligible to make the downsizer contributions, you need to meet the following criteria:

• 65 years or older
• You or your spouse have owned your home for 10+ years
• Your home is exempt or partially exempt from capital gains tax under the main residence exemption
• The proceeds are contributed to your super fund within 90 days of receipt
• You provide the super fund with a downsizer contribution into super form
• The contribution cannot exceed the actual proceeds of the home (which in any capital city is highly unlikely anyway)

Note: caravans, house boats and mobile homes are not included.

The amount must be a one-off, and up to $300,000 (each, in the case of a couple). This is not taxable to the super fund. Also, the amount is not counted as a non-concessional contribution and is therefore not counted towards the $1.6 million.

The full rundown of the downsizer contribution can be found on the ATO website here.

Thanks Shelley for the great question! Since the introduction, I am yet to see anyone take advantage of the concession, so I really wonder how widely understood it is.

If anyone has further questions or needs assistance with this, feel free to contact me directly: mtcopsey@allworths.com.au

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