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Downsizer super contributions

A downsizer contribution lets you add money to your super after you sell your home.

What is a downsizer contribution?

A downsizer contribution is money you can add to super after you sell your home.

It can boost your super. It can also help support your retirement income.

If you meet the eligibility rules, you and your spouse can each add up to $300,000. Together, you can’t contribute more than the money you receive from selling your home.

You can only add a downsizer contribution to your super once. And downsizer contributions are not taxed when they go into super.

Bruce and Jo split contributions

A couple, Bruce and Jo, sell their home for $850,000. Together, they can contribute up to $600,000 to their super, in total. They can split the contribution between them (so, $300,000 each). Or they can contribute an amount that suits them, up to $300,000 each. For example, $300,000 for Jo and $100,000 for Bruce.

Source: ATO

Why make a downsizer contribution

A downsizer contribution may help you:

Does it mean I have to downsize my home?

No. The downsizer contribution rules do not require you to move to a smaller or cheaper home. You also do not need to buy another home.

What matters is that you sell your home and meet the eligibility rules.

Downsizer contributions

How downsizer contributions work

Downsizer contribution rules

You can make downsizer contributions if you meet these downsizer contribution rules.

check_box You’re 55 or older when you make the contribution.

check_box The home qualifies for a full or partial capital gains tax exemption. This usually means it was your main residence.

check_box The home is in Australia. It is not a caravan, houseboat or other mobile home.

check_box You or your spouse owned the home for 10 years or more.

check_box You put the money into super within 90 days of receiving the sale proceeds.

check_box You have not made a downsizer contribution before.

check_box You give your super fund a completed downsizer contribution form on time.

If only your spouse owned the home, you may still both qualify to make a downsizer contribution, if you meet the other rules.

John and Fatima sell their home

A couple, John and Fatima, sell their home for $600,000. Only John is on the title. Both John and Fatima meet all the other rules. So, they can each make a downsizer contribution to their super account of up to $300,000.

Source: ATO

How to make a downsizer contribution

Steps to make a downsizer contribution.

  1. Check your super fund accepts downsizer contributions.
  2. Check your home meets the downsizer contribution rules.
  3. Sell your home. Note the settlement date.
  4. Complete the ATO’s downsizer form or get a form from your super fund.
  5. Give the form to your super fund before you contribute, or at the same time.
  6. Make the contribution within 90 days of getting the sale money.

You can split your downsizer contribution across super funds. You need a separate form for each contribution.

The ATO has more information on eligibility and detailed guidance on making downsizer contributions on the ATO website.

Will a downsizer contribution affect my age pension?

Selling your home can affect your Age Pension. This can happen whether or not you make a downsizer contribution.

If you buy a cheaper home, you may have money left over. The same applies if you don’t buy another home. Money you keep outside your home is usually counted under the Age Pension assets test.

Centrelink may treat some of your savings as income. This can happen even if you earn little interest. This is called deeming. If you have money left after the sale, it may affect your Age Pension under the income test.

Services Australia has more information about the assets test and the income test.

There are other things to weigh up when you're thinking about downsizing your home, and other alternatives to consider.   

Get help if you need it

Selling your home and adding money into super is a big decision. Downsizer contribution rules are strict, including the time limit.

If you’re not sure what to do, you can get help from:

You can also contactServices Australia’s Financial Information Service (FIS). They can explain how selling your home may affect your eligibility for government payments.

Or you can read about what happens if you sell or move out of your home on the Services Australia website.

Key actions you can take