Downsizing your home and contributing to superannuation. Downsizer contributions explained.

If you're thinking about downsizing your home, you may be wondering what to do with the proceeds, and one of the options you could be considering is contributing it to superannuation and benefiting from the many tax advantages it provides.

Your options will depend on your circumstances and you should seek advice from a professional, as the penalties for getting it wrong can be quite harsh.

Broadly speaking, the options available will depend on your age.

For those under the age of 65, you may be able to take advantage of both the concessional and non-concessional contribution caps. Depending on your individual circumstances (including what contributions you've made in the past) you may be able to contribute as much as $325,000 to superannuation. You need to be careful how much you contribute though, the penalties for exceeding contribution caps are heavy.

For those over the age of 65, you may also be able to take advantage of both the concessional and non-concessional contribution caps, but there are restrictions, particularly if you're no longer working. Failing that, you may be able to take advantage of the downsizer contribution rules.

What are the downsizer contribution rules?

  • You'll need to be over the age of 65

  • The amount being contributed if from the proceeds of selling your home

  • You and/or your spouse owned the home for 10 or more years prior to the sale

  • The sale is exempt or partially exempt from CGT

  • You make the contribution within 90 days of the sale

  • You have to provide your superannuation fund with a downsizer contribution form

There are some other factors that you'll need to consider before making the contribution, so make sure you get some advice or speak to the ATO before deciding to make the contribution.

What are some of the benefits of contributing to superannuation?

  • You'll be able to invest the funds and likely benefit from superior long term returns compared to term deposits and savings accounts

  • Depending on the amount you contribute, you could make significant tax savings on investment earnings

  • You may be able to start a pension with the contributed funds and draw a tax free income to fund your retirement

Downsizing your home can be a great way to build your retirement assets. For some, it may be the difference between them living the retirement they want or not. For others, its could be a way to retire earlier than originally planned.


Micheal Anderson, Karthik Ganapathy Sivashanmugham and A.G.S Financial Services Pty Ltd t/as Aurora Wealth are Authorised Representatives of Synchron, AFS Licence No. 243313.

The information contained on this website is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.

Our Privacy Policy can be accessed here.