THINKING of downsizing and putting some of the proceeds of the sale of your former home into superannuation? Here’s what you should know...
The new measure, which came into force from July 1, allows people who are 65 and over to make a contribution of up to $300,000 (for an individual) or up to $600,000 (couple) into their superannuation from the proceeds of the sale.
A new fact sheet from the Australian Taxation Office is a must for anyone considering taking advantage of the measure.
The downsizer contributions will not count towards your concessional or non-concessional superannuation contribution caps.
However, when your total super balance is recalculated at the end of the financial year, the downsizer contribution amount will count towards your total super balance.
Downsizers need to make their contribution within 90 days of the change of ownership, however in some circumstances you may be able to request a longer period.
The new measure does not apply to caravans, houseboats or other mobile homes.
It is recommended downsizers seek financial advice before entering into the arrangement, as the downsizing contributions will count as an asset for the age pension assets test. You should also check that your super fund will accept a downsizer contribution.
For more details, download the ATO fact sheet HERE
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