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Do you know about the Downsizer Super Scheme?

Are you aged 55 or older and looking to downsize your home? You need to know about the downsizer super scheme.

As the brood leaves the nest and the house becomes too big, one great option is to sell and downsize to a more manageable home which can have the added benefit of increasing your retirement savings.

To increase housing stock the government has stepped in and provided those wanting to downsize their home an incentive to help increase real estate stock levels. This incentive is the opportunity to make a tax-free contribution of up to $300,000 from the sale or part sale of your home into your super fund. This is a great option for those wanting to supercharge your retirement especially if you are a couple as you could potentially add up to $600,000 into your joint super.  The incentive commenced in July 2018 when the contribution age was set at 65, but as of the 1st of January 2023 this has now been lowered to 55.

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There is no maximum age limit, but other specific requirements include: 

  • The home must be in Australia, have been owned by you or spouse for at least 10 years and the disposal must be exempt or partially exempt from capital gains tax (CGT). 
  • You have not previously made a downsizer contribution to your super from the sale of another home or from the part sale of your home. 
  • Prior to (or at the same time) as making your contribution you must provide your fund with the ‘Downsizer contribution into super form

To get started, first of all get in touch with us to discuss what will be best for you. The next steps are outlined on the ATO website as follows:

  1. Contact your super fund(s) to check that they accept downsizer contributions. 
  2. You’ll need to submit a Downsizer contribution into super form with or before your contribution is made. If you don’t, your fund may not be able to accept your contribution as a downsizer contribution
  3. If you make multiple contributions to one or multiple super funds, you must provide a Downsizer contribution into super form for each contribution, remembering the total of your individual contributions must not exceed $300,000. 
  4. Contributions must be made to your super fund within 90 days of receiving the proceeds of sale, however in some circumstances you may be able to request an extension of time.

Contact us today if you’re looking to downsize in the Northern Illawarra or Wollongong to chat about how we can help.

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