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Contributing the proceeds of downsizing to superannuation

Downsizer contribution cap, notification and timeframes

Section: 22.5

The total amount of downsizer contributions that can be made in respect of an individual is the lesser of:

  • $300,000, and
  • the total proceeds that the individual and their spouse receive from disposing of their ownership interests in the dwelling.

The amount of the cap for a particular contribution is reduced by any earlier contributions in respect of those proceeds that have already been made by either spouse.

An individual can make as many downsizer contributions as they wish. However, the contributions can only ever be made from the proceeds of one sale of a dwelling.

Treating a contribution as a downsizer contribution

An individual must make a choice to treat a contribution as a downsizer contribution. This choice must be made in the approved form and given to the superannuation provider that accepts the contribution before or at the time the contribution is made.

Contribution must be made within 90 days

A contribution must be made within 90 days, or such longer time as the Commissioner allows, of the change in ownership that occurs as a result of the disposal of the relevant ownership interest, usually the settlement date.

Example (continued, see 22.4 - Qualifying dwelling in Australia)

Upon selling the home Dec 2018 that Rebecca bought in 2004, where her new spouse Ben now also resides, they receive capital proceeds of $550,000. Rebecca chooses to make a downsizer contribution to her super fund of $300,000 and Ben makes a contribution to his fund of $250,000.

The downsizer contributions in respect of Rebecca and Ben are both valid, assuming all the other criteria are also met.

Alternatively, they could have made the same amount of $275,000 each. Any combination will be valid so long as neither of their total individual downsizer contributions exceed $300,000 and the total combined amount that is made does not exceed the proceeds of the sale of the home.

Last modified: Wednesday, May 1, 2019