Earlier this month, the Australian Parliament passed legislation that allows Australian citizens who are 60 years of age to boost their superannuation using their home sale proceeds. The updates will come into effect from 1 July 2022.
The Australian Senate has approved amendments to the downsizer superannuation contribution legislation. The legislation has reduced the minimum age to use the scheme from 65 to 60 years.
The scheme allows individuals and couples to make contributions into their superannuation within 90 days of the settlement of their property, which means that homeowners over 60 could sell their property from late April onwards and make the contribution as at 1 July this year.
While announcing the legislation’s approval the Treasurer, Josh Frydenberg, revealed that under this measure 36,800 individuals contributed $8.9 billion to their superannuation from 1 July 2018 to the end of January 2022.
The legislative change will allow a slightly younger cohort of Australians to consider downsizing their homes according to their needs. Homeowners who’ve used the scheme to date have boosted their superannuation by an average of $241,000.
In the long term, it will increase the supply of larger homes for young families who are looking to upsize by encouraging older Australians to consider downsizing sooner. Financial experts suggest that these changes could be a huge relief for people wanting to retire up to ten years early.
The downsizer contribution enables individuals to invest up to $300,000 - and couples up to $600,000 - from their home sales to their retirement funds.
To be eligible you should have lived in the place for a minimum of 10 years, the property must be your main residence (for Capital Gains Tax purposes) and it has to be sold in the family name.
To find out more about the scheme, read our Downsizers’ Guide To Making Superannuation Contributions.
Homesuite will guide your downsizing journey, helping you to make financial decisions, maximise your sale price, and coordinate the services you need along the way. Give our team a call on 1300 025 108 to discuss how Homesuite can support you.
