In the Federal Budget 2017 - 18, downsizer superannuation contributions were introduced to reduce the barriers for older Australians to move from homes that no longer meet their needs, opening up additional homes for younger Australian families.
Downsizer contributions can be made by individuals 65 years old or over to superannuation funds from 1 July 2018. Up to $300,000 can be contributed to a superannuation fund after selling their primary place of residence that has been owned for at least 10 years.
Despite the name, individuals do not need to buy a new home, or buy a smaller or less valuable house to contribute under these measures.
Downsizer contributions are special in that they can be made without meeting the work test, without adding to your non-concessional cap and can even be made if individuals have a total superannuation balance of more than $1.6 million.
Once in your superannuation fund the contribution amounts count towards your total superannuation balance which could limit a members' future contributions as a result of the $1.6 million cap. Eligibility for the age pension may also be affected by making downsizer contributions as the age pension asset test includes superannuation balances but excludes an individual's principle home.
Please let us know if you are interested in learning more about downsizer contributions from our superannuation specialist, Nadine Hill | Principal.
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The information provided in this brochure does not constitute advice. The information is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. We recommend that you contact Brentnalls SA before making any decision to discuss your particular requirements or circumstances.