The $600,000 government incentive for seniors to downsize
From July 1, a new incentive for older Australians selling a family home has kicked in.
The Federal Government is encouraging people aged 65 and over, who have lived in their home for at least 10 years, to downsize and put extra money into their superannuation funds.
Older homeowners will be able to make a post-tax contribution to their superannuation fund of up to $300,000 for one person and $600,000 for a couple.
These new contributions will be in addition to any other voluntary contributions people are able to make under the existing rules and concessional and non-concessional caps.
The downsizer superannuation contributions scheme, announced in last year’s Federal Budget, wants to encourage older homeowners to downsize, which will free up homes for younger families.
What you need to know
- Coming into effect July 1, 2018, the downsizer superannuation contributions scheme is available to homeowners aged 65 and over
- The property must have been held for at least 10 years and been the owner’s principal place of residence. However, the homeowner does not have to have lived in the home for all of those 10 years.
- Both the owner and their spouse can contribute, even if the spouse is not on the title of the property.
- Homeowners can only make one downsizer contribution per person
- A homeowner can contribute up to $300,000 – and a couple can contribute $600,000 – from the sale of their home into a superannuation fund.
- Downsizers have 90 days after their property settles to make the contribution.
- The contribution is not exempt from the Age Pension means test and may affect a government pension.
Article created in partnership with Over60