For older Australians being unable to invest the proceeds from selling their homes into superannuation has been a great discouragement towards downsizing. The proposed new measure from the 2017 Federal Budget, to reduce pressure on housing affordability allowing the contributions from proceeds of downsizing your home into superannuation has now passed both houses of parliament. The government hopes this measure will encourage some people to downsize into housing that is more suitable to their needs, freeing up larger family homes.
From 1 July 2018, people aged 65 and over will be able to make a non-concessional (post-tax) contribution into their superannuation of up to $300,000 from the proceeds of selling their home.
The existing voluntary contribution rules for people aged 65 and older (work test for 65-74 year olds, no contributions for those aged 75 and over) and restrictions on non-concessional contributions for people with balances above $1.6 million will not apply to contributions made under this new special downsizing cap.
This measure will apply to a principal place of residence held for a minimum of 10 years. Both members of a couple will be able to take advantage of this measure for the same home, meaning $600,000 per couple can be contributed to superannuation through the downsizing cap.
These new contributions will be in addition to any other voluntary contributions that people are able to make under the existing contribution rules and concessional and non-concessional caps.
For further information on Downsizing Contributions to Super please follow the link below or contact us on (07) 3446 5906 or via email.
Downsizing Contributions into Super