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How to downsize and turbocharge your super


You can divert up to $300,000 of proceeds on the sale of your home into your super fund, penalty-free.

  • Finance
  • Read Time: 4 mins

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Since the superannuation guarantee was introduced in 1992, Australia’s super laws and regulations have changed a few times.

Seniors who’ve found it hard to keep up with those changes risk falling foul of the rules or missing out on a benefit they didn’t know about.

One change has made it more beneficial for seniors to downsize from a big empty nest to a more manageable property.

The idea was to make downsizing easier for older Australians to make more homes available to younger families.

From 1 July 2018, people aged 65 and older have been able to make a non-concessional (post-tax) superannuation contribution of up to $300,000 from the proceeds of selling their home.

Pre-existing contribution caps and restrictions on people over 65 do not apply to the downsizer contribution.

People under 65 can generally already make non-concessional contributions of $100,000 per year, or $300,000 in a year using the three-year “bring forward” rule.

Main residence


All dwellings – apart from caravans, houseboats, and mobile homes – are eligible, as long as the home has been owned for 10 years before sale.

You don’t have to have lived in the home for the entire 10 years, but it must qualify as a “main residence” under Capital Gains Tax (CGT) exemption rules.

If you’re in doubt about this, or anything else about the provision, seek professional advice.

You are eligible by virtue of selling the home, you don’t have to immediately purchase a new home – but you do have to make the super contribution within 90 days of settlement on the sale.

You can contribute any amount into super up to $300,000.

This can be done only once in your lifetime; it’s not available under any subsequent downsizing. 

Also bear in mind that your super contribution will still be taken into account for the Age Pension means test.

Source: Australian Government fact sheet

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