The downsizer contribution concession was introduced from 1 July 2018 to allow older Australians selling an eligible dwelling to make additional contributions (over and above their standard contribution caps) into their superannuation fund.
Broadly, the downsizer contribution concession has traditionally allowed eligible individuals aged 65 or more before 1 July 2022, or aged 60 or more from 1 July 2022, to make non-deductible contributions of up to $300,000 (or up to $600,000 per couple) from the sale of an eligible dwelling that was used as their main residence.
The downsizer contribution concession is an attractive option for eligible individuals to boost their superannuation entitlements, particularly for the following reasons:
There are various eligibility requirements that need to be satisfied in order for a downsizer contribution to be made, including (among others) the ’10-year ownership test’, and the requirement that the disposal of the dwelling must qualify for a partial or full CGT main residence exemption.
As from 1 January 2023, the Government has broadened access to the downsizer contribution concession by reducing the minimum age requirement for accessing this concession from age 60 to age 55. This means that individuals aged 55 to 59 years who were not previously eligible to make downsizer contributions due to their age are now eligible to make downsizer contributions if they satisfy all the eligibility requirements.
It is also important to note the following:
Ref: National Tax & Accountants' Association Ltd 'The Tax Advisors' Voice' monthly newsletter August 2023.