What is a downsizer contribution?
If you're 55 or over, you might be able to add up to $300,000 to your super tax-free when selling a property you've lived in. This is called a downsizer contribution to super.
If your spouse is also 55 or older, you can add up to $600,000 in total between the two of you.
It's a tax-free contribution even if only one of you is listed as an owner of the property.
What's the meaning of downsizing?
Downsizing is when you sell your current home and move to a smaller one. You don’t have to buy a new, smaller home when you make a downsizer contribution.
Pros and cons of downsizer contributions
Benefits of downsizer
It’s an after-tax contribution, so you don’t pay the 15% contributions tax when you add it to your super.
It doesn't count towards any of the contribution caps that limit how much you can add to your super.
If you have a spouse, you can both make a downsizer contribution, up to $600,000 total.
If you’re over 60 and retired, you can take out the money tax-free when you withdraw it or turn it into a retirement income stream.
There’s no balance requirement, so you can make a downsizer contribution even if your total super balance is over $1.9 million.
You don’t need to still be working when you make a downsizer contribution, because there’s no work test.
Once the money is in your super account, you can turn it into retirement income, with an Income account and/or our Lifetime Pension.
Limits and things to be aware of
It’s a once-off opportunity, so you can’t make a downsizer contribution if you sell other homes in the future.
You or your spouse need to have owned the home for more than 10 years before selling.
You need to have lived in it as your “main residence” at least some of the time, and have no capital gains tax (CGT) on the sale.
Because you're adding the money to your super, you have to wait until you're a certain age and/or retired before you can withdraw the money.
You need to submit your form at or before the time you make the contribution, This means you could accidentally go over your contribution caps if you don’t time it right.
Adding money to your super may could affect your Age Pension because of Centrelink’s assets test.
You can claim a tax deduction for other types of contributions, but not for a downsizer contribution.
Who can make a downsizer contribution?
You can make a downsizer contribution even if your total super balance is over $1.9 million, and there’s no work test. You only need to meet these requirements from the Australian Taxation Office (ATO):
You’re 55 years or older (no maximum age limit)
Your home is in Australia and is not a caravan, houseboat, or other mobile home
Your contract of sale was on or after 1 July 2018
You (and/or a spouse) owned your home for more than 10 years before selling, and spent at least some of that time living in it (your "main residence")
You haven’t already made a downsizer contribution from selling another home
How to make a downsizer contribution
Either before or at the same time you’re making your contribution, you need to fill in the ATO’s Downsizer contribution into super form, and send it to us.
Follow these steps
Complete the form
Download and fill in the ATO’s Downsizer contribution into super form, or call us to have a copy posted to you.
Make the contribution
Once you’ve checked how much you can contribute, you can deposit it into your super by:
a
Send us a cheque with your downsizer form.
c
Log in to Member Online and select direct debit.
Send it to us
You can send us the form by email, post/mail, or in person – see our contact us page for details.
To make a downsizer contribution, you have to send the money and your downsizer form within 90 days of receiving the money from selling the property. This usually means within 90 days of your settlement date.
Case study
Taylor and Lee are both over 60 and they’ve just sold the family home they lived in for more than 10 years.
If their house sells for $950,000, they could add up to $300,000 each to their super accounts.
If their house sold for only $500,000, they could contribute up to $250,000 each to their super. Or they could top up the account with the lower balance by splitting the contributions – adding $300,000 to one and $200,000 to the other.
Did you know?
In 2021-22, more than 600 of our members made downsizer contributions, with an average contribution of around $231,000.