As announced in the 2017-18 budget, the proceeds from sale of property may be contributed into superannuation. This was a government measure aimed at addressing the issue of housing affordability in Australia. These proposed measures have now become law.
From 1 July 2018, Australians aged 65 years or older are able to make a non-concessional (after-tax) contribution into their super account of up to $300,000 from the sale proceeds of their family home if they have owned the property for at least 10 years. Couples will be able to contribute up to $300,000 each, giving a total contribution per couple of up to $600,000. The legislated rules indicate that the property sold must be the person’s main residence and be eligible for the main residence exemption rule.
Additionally, those considering making a downsizer contribution would have to satisfy all of the following:
- you are 65 years old or older at the time you make a downsizer contribution (there is no maximum age limit)
- the amount you are contributing is from the proceeds of selling your home where the contract of sale exchanged on or after 1 July 2018
- your home was owned by you or your spouse for 10 years or more prior to the sale – the ownership period is generally calculated from the date of settlement of purchase to the date of settlement of sale
- your home is in Australia and is not a caravan, houseboat or other mobile home
- the proceeds (capital gain or loss) from the sale of the home are either exempt or partially exempt from capital gains tax (CGT) under the main residence exemption, or would be entitled to such an exemption if the home was a CGT rather than a pre-CGT (acquired before 20 September 1985) asset
- you have provided your super fund with the Downsizer contribution into super form either before or at the time of making your downsizer contribution
- you make your downsizer contribution within 90 days of receiving the proceeds of sale, which is usually at the date of settlement
- you have not previously made a downsizer contribution to your super from the sale of another home.
Additional criteria may apply.