OVER 65? SELL YOUR HOME AND CONTRIBUTE MORE TO SUPER
In the 2017 Federal Budget (released on 9 May 2017), the government announced that it wanted to encourage “some older people to downsize from homes that no longer meet their needs and free up housing stock for young families starting out”.
From 1 July 2018, an Australian aged 65 years or over will be able to make non-concessional (after-tax) contributions into a super fund account (accumulation account), up to a maximum of $300,000, from the proceeds of selling their home. If a couple sells their home, they can contribute up to $300,000 each.
A person is only eligible for this measure if they have owned their principal place of residence for a minimum of 10 years.
Under this measure, the work test would not apply which means retired couples, or a single person, won’t have to worry about satisfying a work test before making super contributions.
In addition, the contributions under this measure don’t count towards the annual $100,000 non-concessional contributions (NCCs) cap, so if a person satisfies the work test, they could also make additional NCCs up to the annual cap.
Under the normal super rules, from 1 July 2017, if a person has $1.6 million or more in super savings they cannot make any non-concessional (after-tax) contributions, but this restriction will not apply if a person aged 65 years or over, sells their home and makes non-concessional contributions to a super account.