When the Federal Budget was announced last May, it contained something specifically aimed at older Australians—a downsizing and super contributions proposal.
But what does it mean? Most simply, it means that as of July 2018, you are able to use $300,000 from the sale of your current home to move across to your superannuation fund. If you’re part of a couple, you both can do this for the same property.
This incentive only applies though if you’ve lived in your home for over 10 years, and are over 65. Tick both boxes? Then it’ll build a healthier super balance for you, which can really come in handy if your super is looking a bit scant. It’ll give you added security in the long-term, and who doesn’t want that?
Check your eligibility here.
While you ordinarily need to prove your employment during the year in order to make contributions to your super, this doesn’t apply within the new incentive. However the asset and income tests that determine the amount of pension you can receive will be impacted by these super contributions, which will be counted as assets.
Your downsizer contribution is not a non-concessional contribution and will not count towards your contributions caps. It can still be made if you have a total super balance greater than $1.6 million.
If you’re not rushing into a new home, don’t worry—you can still make use of the savings without having to purchase a property after the sale of your home.
But what if you don’t have any super to add to? If you’re over 75 and haven’t had a work record in Australia, you should still be able to utilise this incentive.
A financial planner will be able to give you advice tailored to your scenario, so check out DailyCare’s list of planners to get in touch with an expert.