Making downsizer contributions to upsize your super

For empty nesters, your house may feel a little oversized without the kids around. Could the time be right to move to a smaller place?

You might even be able to use the money to give your super a sizeable boost.

What is a downsizer contribution?

The Government’s downsizer contribution initiative lets older Australians sell their home and put some of the money from the sale into their super account.

If you’re over 55, you may be able to add up to $300,000 from the sale proceeds into your super account. It doesn’t matter how much you already have in super and there’s no upper age limit. 

Making a downsizer contribution could help you unlock hard-earned funds to enjoy retirement. But there are lots of rules involved, so downsizing isn’t necessarily for everyone. Keep reading to find out if it’s right for you.

Am I eligible to make a downsizer contribution?

You can make a downsizer contribution to your super if:

• you’re aged 55 or over (and it doesn’t matter if you’re working or not – you don’t need to pass a work test to be eligible)
• your home is in Australia, and isn’t a houseboat, caravan or mobile home
• you (or your spouse) owned the home for at least 10 years prior to the sale
• the property you’re selling was at one time the main residence of you or your spouse for tax purposes*
• you haven’t previously made a downsizer contribution from the sale of another home
• you submit your completed Downsizer contribution into super form either before or at the time of making your contribution
• you make your downsizer contribution within 90 days of receiving the sale proceeds (generally the settlement date)

How much can I make in downsizer contributions?

• As an individual, you can make a downsizer contribution of up to $300,000.
• As a couple, you and your spouse can each contribute up to $300,000 ($600,000 combined). Both of you would need to separately make an individual downsizer contribution.
• The contribution can’t be more than the total sale proceeds from your home.

What are other things I should know about the downsizer contribution?

• When it comes to your Age Pension, no Centrelink concessions apply for the amount contributed under the downsizer contribution. It’s important to think about how selling your home and contributing to your super might impact your Age Pension.
• Your contribution isn’t counted as a non-concessional contribution, so it won’t count towards your contribution caps.
• Your contribution will count towards your transfer balance cap which applies when your super savings move into retirement phase.

How do I make a downsizer contribution?

For Rest Super members

If you’re a Rest Super member, here’s what you need to do:

• Complete the Downsizer contribution into super form.
• Send the form (by email or post) and your contribution (by BPAY® or cheque) to us.
• We’ll add your downsizer contribution into your Rest account and report it to the ATO. We’ll let you know when the ATO confirms whether it’s a valid contribution.

For Rest Pension members

If you’re a Rest Pension member, the process looks a little different.

Firstly, if you don’t have a Rest Super account, we’ll open one for you. You can make your downsizer contribution to this account.

You can then either:

• transfer the Rest Super amount to an additional Rest Pension account, or
• consolidate your current Rest Pension account with the contribution into a new Rest Pension account.

Need advice about making a downsizer contribution?

It’s important to remember that downsizing won’t be for everyone. Depending on your situation, additional rules and implications may apply, so you might like to chat with a financial adviser. A professional can:

• help you decide if using the scheme can benefit you
• check your eligibility
• discuss the retirement, tax and Centrelink implications of making a downsizer contribution