One of the key takeaways from last week’s budget was the reduction in the eligibilty age for downsizer measure contributions.

From 1 July 2022 it is proposed that anyone 60 years of age and older will be eligible to make a downsizer contribution. The downsizer contribution allows people to make a one-off after-tax contribution to super of up to $300,000 from the proceeds of selling their home they have
held for at least 10 years.

Under the rules both members of a couple can make downsizer contributions in respect of the same home, and the contributions do not count towards a member’s nonconcessional contribution caps.

So what does this mean for you?

If you’re an eligible couple in your early sixties, you can potentially sell your home to contribute up to $1.26m to super in a year via a combination of $300,000 downsizer contribution and $330,000 non-concessional contribution each.

However, if you’re a person in your early sixties wanting to contribute a much smaller amount, it might be a good idea to see an adviser to get advice on what type of contributions you should make.

For example, if you have $300,000 from the sale of your home that you wanted to contribute to super, you might be better off making a $300,000 after-tax contribution under the bring-forward rules in order to preserve your ability to make a downsizer contribution in the future.

If this sounds like a strategy that you or one of your family or friends should be considering, please contact one of the team on 086222 7909 or to speak to one of team or reach out to your finance professional.

Written by

Inspired Money