Australians 55 and over may use downsizer scheme to top up super

From 1 January 2023, eligible Australians aged 55 and over are now able to use some of the proceeds from the sale of the family home to top up their superannuation, under a change in the rules reducing the downsizer eligibility age from 60 to 55.

Downsizer super contributions allow eligible Australians to make a one-off contribution of up to $300,000 per person (or $600,000 per couple) when they sell their family home.

Downsize your home to upsize your super

The downsizer scheme was initially introduced in the 2017-18 Federal Budget to allow eligible Australians 65 years and older to make a one-off contribution to their super account worth up to $300,000 after selling their home, outside of the normal rules governing the tax treatment of super contributions.

From 1 July 2022, the minimum age for the downsizer contribution was reduced to 60 years and from 1 January 2023, that age limit has now been reduced to 55 years.¹

Who is downsizing?

Australian Government figures showed that in 2018-19, the first year of the downsizer scheme, 4,246 individuals across Australia downsized from their family homes, contributing $1 billion to their superannuation funds.²

In 2021-22, more than 1022 downsizer contributions were made by Australian Retirement Trust members with a QSuper account, with the average contribution around $233,000 and an average age of 73. The total of these contributions was almost $238 million.³

How the downsizer contribution works

If you are eligible, the downsizer contribution is an amount of up to $300,000 that can be paid into your super, from the proceeds of selling your home. If you have a spouse, the total contribution is up to $600,000 ($300,000 each).

Your downsizer contribution is not a non-concessional contribution and will not count towards your contributions caps.

People with balances over the transfer balance cap (which is $1.7 million) are also able to make a downsizer contribution, however the downsizer amount will count towards that cap when savings are converted to the retirement phase.

Who is eligible for the downsizer scheme?

You (and if applicable, your spouse) will be eligible to make a downsizer contribution to super if you can answer yes to all the following:

• You are 55 years old or older at the time you make a downsizer contribution (there is no maximum age limit).
• You make your downsizer contribution within 90 days of receiving the proceeds of sale, which is usually at the date of settlement.
• The amount you are contributing is from the proceeds of selling your home, where the contract of sale was exchanged on or after 1 July 2018.
• Your home was owned by you or your spouse for 10 years or more prior to the sale (the ownership period is generally calculated from the date of settlement of purchase, to the date of settlement of sale).
• Your home is in Australia and is not a caravan, houseboat, or other mobile home.
• The proceeds (capital gain or loss) from the sale of the home are either exempt, or partially exempt from capital gains tax (CGT) under the main residence exemption, or would be entitled to such an exemption, if the home was a CGT rather than a pre‐CGT (acquired before 20 September 1985) asset.
• You have provided your super fund with the Downsizer Contribution into Superannuation form either before, or at the time of making your downsizer contribution.
• You have not previously made a downsizer contribution to your super from the sale of another home.

Interested in making a downsizer contribution?

1. Parliament of Australia, Treasury Laws Amendment (2022 Measures No. 2) Bill 2022, accessed 7 December 2022
2. Media Release, 28 June 2019, Downsizer contributions reach $1 billion, at ministers.treasury.gov.au
3. QSuper member data.