Further eligibility age change for downsizer contributions

The reduction in the eligibility age to make a downsizer contribution to being aged 55 or older is now law, with the Treasury Laws Amendment (2022 Measures No. 2) Bill 2022 receiving royal assent on 12 December 2022. This further reduces the downsizer eligibility age, which changed from 65 to 60 on 1 July 2022.

From 1 January 2023, eligible individuals aged 55 years or older can choose to make a downsizer contribution into their super fund of up to $300,000 per person ($600,000 per couple) from the proceeds of selling their home. There are no changes to the remaining eligibility criteria.

Key dates for downsizer contributions:

• Eligible individuals aged 55 years or older can make a downsizer contribution from 1 January 2023. q For any downsizer contributions made between 1 July 2022 and 31 December 2022, eligible individuals must be aged 60 years or older at the time of making their contribution.
• Prior to 1 July 2022, the eligibility age was 65 years and over.

Other important information to consider for 55-59 year olds:

• Individuals have 90 days from receiving the sale proceeds of their home to make a downsizer contribution. This means if an individual receives the proceeds of sale prior to 1 January 2023, they can make their contribution after 1 January 2023, so long as they are still making it within 90 days of receiving the proceeds.
• If 1 January 2023 falls outside of their 90 day window to make a downsizer contribution, they will not be eligible. It is unlikely the ATO would grant an extension of time in these circumstances.

To review the Treasury Laws Amendment (2022 Measures No. 2) Bill 2022, visit the Australian Government website

Ref: Treasury Laws Amendment (2022 Measures No. 2) Bill 2022