An incentive has been announced in the recent Federal Budget targeted at senior citizens to encourage Australians to downsize from their over-sized, high maintenance homes into accommodation better suited for their stage of life.
Under the Downsizing Contribution Scheme, if you are an Australian citizen aged over 65, you are eligible to make contributions from the sale of your home into your superannuation fund, provided you meet a variety of conditions, including having lived there for more than 10 years.
This scheme is already proving to be very effective, and the government has now announced that as of 1 July 2022 the rules will be stretched to accommodate people aged 60 and over.
This contribution allows you to make a one-off, post-tax contribution to your superannuation of up to $300,000 per person (or $600,000 per couple) from the proceeds of selling your home, subject to meeting certain criteria.
Eligibility for the downsizer measure
You will be eligible to make a downsizer contribution to super if you can answer yes to 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.
Note: If your home was only owned by one spouse, the spouse that did not have an ownership interest may also make a downsizer contribution, or have one made on their behalf, provided they meet all of the other requirements.*
* Source: ato.gov.au
If you’re considering downsizing, there is a lot to think about and even more to organise. As your Vendor Advocate we help you prepare your home for sale, choose the best real estate agent and then protect your interests by liasing directly with the agent on your behalf. Keeping the agent honest and focused on achieving the best outcome for you is our main priority. The best part about this service – it costs you nothing over and above the agent’s fee. This is because the agent shares a portion of their commission with us.
We can visit your home, provide an unbiased assessment of value and some ideas on how to maximise your sale price with absolutely no obligation to proceed with us. Feel free to book in a time with me for a quick chat here: https://calendly.com/innovativepropertyadvocates
or call now on 0411 522233.
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