NEW “Downsizer” Contributions
From 1 July 2018, individuals aged 65 or over have the opportunity to make non-concessional contributions to their super fund up to $300,000 from the proceeds of selling their home.
These contributions will not count towards the non-concessional contributions cap and the individual making the contribution will not need to meet the existing maximum age, work test or $1.6 million balance test that usually apply when someone aged 65 years or older makes a contribution to super.
If the home is jointly owned, both members of a couple can contribute to their superannuation thereby allowing up to $600,000 to be contributed.
There are some conditions to meet:
- The contract for sale has to be dated after 1 July 2018;
- The property sold (“qualifying property”) must have been owned by the individual (either solely or jointly) for the past 10 or more years;
- The property must have been the principal residence of the individual;
- The contribution must have been made within 90 days of the disposal;
- The individual must choose to treat the contribution as a downsizer contribution, and notify their superannuation fund in the approved form of this choice at the time the contribution is made;
- You cannot have used the downsizer contributions measure in relation to an earlier disposal of a main residence.
If you would like to know more about downsizer contributions, please contact Stan for assistance.