Downsize your home and maximise your super too!

Are you over 65 and want to downsize your home?

If you are over 65 and have been thinking about downsizing your home, it is now the time to do so! As of 1 July 2018, homeowners over the age of 65 can sell their home and put up to $300,000 ($600,000 for a couple) of the proceeds into super as a non-concessional (after-tax) contribution.

How can this benefit you?

People have been using this strategy of downsizing and topping up surplus funds into super for years. So what’s so great about this scheme?

Well firstly, it allows you to maximise your savings in a tax effective environment of the super system.

Secondly, it disregards various contribution restrictions such as:

  • The contribution is on top of the current annual non-concessional cap, of $100,000.
  • There is no requirement to meet the work test for those age 65-74 (generally, those age 65-74 must work 40 hours in 30 consecutive days to pass the work test and therefore be eligible to make super contributions).
  • There is no maximum age (generally, those age 75 and over are restricted from making contributions completely). This new provision will essentially allow a 92-year old to contribute to super!

Thirdly, individuals are exempt from the new $1.6 million total super balance restriction. This refers to the limit where individuals can no longer make non-concessional contributions to super if their balance is $1.6 million or greater.

Finally, being over 65, you have full access to your funds in super because you’ve already met a full condition of release.


There are however, specific requirements, which you must meet to be eligible for the scheme. These include the following:

  • You must be 65+ years at the time you make the contribution
  • You must have sold your home on or after 1 July 2018
  • Your home can not be a caravan, houseboat, or mobile home
  • You or your spouse must have owned the property for minimum of 10 years, in which it was considered a ‘main residence’ for at least some of that period.
  • The contribution is made within 90 days of receiving the sale proceeds.

Issues to Consider

There is no requirement for you to purchase another home using the sale proceeds.

You can only make downsizing contributions for the sale of one home. You can’t access it again for the sale of a second home.
Centrelink and Aged Care implications – your main residence is exempt from Centrelink and Aged Care Means testing, and by selling your home and contributing to super, the ‘asset’ will move to a non-exempt and assessable environment of the super fund, and be subject to Means testing. This would therefore risk the loss or reduction of your Age Pension payments and costs of Aged Care.

$1.6 million total super balance and transfer balance cap – the contribution will count towards your total super balance and the transfer balance cap. Whilst you’ll be able to make the contribution even if your balance is $1.6 million or more, any amounts over the cap will need to remain in accumulation phase and be subject to 15% tax on the earnings generated.

If you are 65+ years old and are considering downsizing, contact Accru Wealth Management today to find out whether this scheme will benefit your situation. Contact one of our Wealth Specialists today for more information on (03) 9835 8200 or alternatively you can complete your details below and we’ll be in touch.

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Enza Venuto , Melbourne
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