About downsizer contributions
If you are 55 years old or older, you may be able to contribute up to $300,000 from the proceeds of the sale (or part sale) of your home into your complying superannuation fund, as a downsizer contribution.
A downsizer contribution does not count towards contributions caps (concessional or non-concessional).
A downsizer contribution will be included in your total superannuation balance (TSB) when it is calculated at the end of the financial year. This may affect your future eligibility under some superannuation rules and entitlements.
Like other contributions, the amount of a downsizer contribution will count towards your transfer balance cap (TBC) when your super goes into a retirement phase account.
Selling your home and making a downsizer contribution may affect income support payments such as the age pension. Services Australia has information about this.
Visit the ATO Publication Ordering Service to download our Contributing the proceeds of downsizing to superExternal Link factsheet.
Consider if a downsizer contribution is suitable for your circumstances
Moneysmart has information you should consider first, see Downsizing in retirement - moneysmart.gov.auExternal Link.
Selling your home and making a downsizer super contribution are significant decisions. You should consider obtaining independent financial advice before proceeding.
Eligibility
To make a downsizer contribution you must meet all the following conditions:
- You are aged 55 years old or older at the time you make the contribution.
- Your home was owned by you and/or your spouse for 10 or more years before the sale. If only one spouse owned the home, the other is also eligible to contribute if the other conditions are met.
- The home being sold is a residential building in Australia and is not a caravan, houseboat, or mobile home.
- The sale qualifies for the main residence capital gains tax (CGT) exemption – either fully or partially; or if the home was purchased before 20 September 1985, it would have qualified if it were a CGT asset.
- You have not previously made a downsizer contribution from the sale of another home, or the part sale of your current home.
- You provide the Downsizer contribution into super form (NAT 75073) to your super fund before, or at the time you make your contribution.
- You contribute within 90 days of receiving the home sale proceeds (usually at settlement) unless you apply for, and we grant you an extension of time.
Contribution limit
You can contribute up to $300,000 per eligible person. For couples, each eligible spouse can contribute up to $300,000. The total downsizer contributions made cannot exceed the total proceeds from the home sale.
How to make a contribution
Prepare to make your contribution and provide the necessary form to your super fund before you contribute.
- Contact your super fund first - to confirm they could accept your downsizer contribution.
- If you don’t have a super fund account that accepts downsizer contributions, open one.
- You must complete the Downsizer contribution into super form and provide it to your super fund before or at the time you make your contribution. If you make your downsizer contribution in multiple payments, complete a form for each one.
- Pay the contribution amount to your super fund. Ensure all contribution payments are made within 90 days of receiving the home sale proceeds, unless you’ve applied for and we’ve granted an extension of time to make the downsizer contribution.
If you need more time
If you're unable, or don't wish to make the downsizer contribution within 90 days of receiving the sale proceeds, you may apply for an extension of time to make your contribution where your circumstances warrant it. Extensions can't be granted to meet age requirements.
Note: You must still provide the Downsizer contribution into super form to your super fund before or at the time you make your contribution.
How to apply for an extension of time to make your downsizer contribution
You need to:
- apply as soon as possible after receiving the sale proceeds – ideally within 90 days
- phone the ATO on 13 10 20 to apply
- if the 90-day period has passed, don't make the contribution until we approve the extension of time.
If you're dissatisfied with a decision to refuse an extension of time, or the duration of an extension granted, you can lodge an objection using the Objection form – for taxpayers (NAT 13471).
After you’ve made the contribution
Super funds (not including SMSFs) have 10 business days to report the contribution information to us. We use this information to administer rules that may apply to you, so we recommend you use ATO online services to check we have received it.
Log in to ATO online servicesExternal Link.
If you don't already have one, create a MyGov account and link it to the ATO. You can also access ATO online services using the ATO app.
To view the reported transaction:
- Select Super from the menu.
- Select Fund details.
- Select the Account name of the account the contribution was made into (even if it was later closed). The downsizer contribution will display as Proceeds of primary residence disposal.
Note: Contact your fund promptly if the downsizer contribution does not display, or the amount displays as a different type of contribution, as this could lead to excess contributions and extra tax payable.
Your total super balance will reflect the amount of the downsizer contribution when your fund reports your 30 June balance for that financial year.
If you make an invalid contribution
If we become aware that your contribution doesn't meet the downsizer contribution eligibility requirements, we will advise your super fund. Your fund will need to assess whether the contribution could have been accepted as a different type of contribution under their acceptance rules.
If your contribution is accepted as an after-tax personal contribution, the amount will count towards your non-concessional contributions cap.
If your contribution can't be accepted, the contribution amount will be returned to you by your super fund.
Penalties may apply for making a false and misleading statement if you incorrectly declare you are eligible to make a downsizer contribution.
Resources
Here are information resources for your reference, and the Downsizer contribution into super form. Most super funds also have information about making downsizer contributions on their websites.
- Downsizing in retirement - Moneysmart.gov.auExternal Link
- ATO factsheet: Contributing the proceeds of downsizing to super
- Downsizer contribution Guidance Note 2018/2
- Downsizer contribution into super form (NAT 75073)
Examples of contributions
Example: contribution of maximum amount
A couple, George and Jane, sell their home for $800,000. Each spouse can contribute up to $300,000.
End of example
Example: contributions can't exceed the total sale proceeds
A couple, Bruce and Betty, sell their home and receive proceeds of $400,000.
Between them, their Downsizer contributions can’t exceed $400,000.
Individually they can contribute up to $300,000 each.
Within these limits they may contribute as they choose – for example, $300,000 for Betty and $100,000 for Bruce.
End of example
Example: property is legally owned by one spouse
A couple, John and Fatima, sell their home and receive proceeds of $600,000. Only John is on the title.
Both John and Fatima meet all the other requirements, so both John and Fatima can each make a downsizer contribution of up to $300,000.
End of example
Example: sale of home and 'in specie' contribution to a self-managed super fund (SMSF)
Alisha sells her home for $1,500,000. As she meets all the requirements, she can make a downsizer contribution of up to a maximum of $300,000.
Alisha has a personal portfolio of listed shares worth $100,000. She also is trustee and member of her SMSF.
Alisha can make a $300,000 downsizer contribution to her SMSF in the form of:
- the $100,000 share portfolio as an in-specie contribution, and
- $200,000 from the proceeds of the home sale.
Example: selling part of the equity in a property
Robert and Wendy decide to sell part of their home’s equity, in an arrangement that allows them to continue to live in the home:
- Their home is currently worth $500,000.
- They sell 20% of the equity in the home and receive proceeds of $100,000.
- They can make downsizer contributions of up to $100,000 between them.
If they decide to sell more of, or all the remaining ownership interest in the property in the future, they will not be eligible to make another downsizer contribution as they can only access the scheme in relation to one disposal of an ownership interest in this or any other home.
End of example
Example: extension of time to make a contribution granted
Ben is 77 years old and decides to sell his family home of 15 years.
Settlement occurs on 1 August 2024.
He purchases a new home in a retirement village which is under construction and due to settle on 1 October 2024.
Ben’s purchase settlement is then delayed until 1 December 2024.
Ben does not want to contribute funds from the sale of his home into his super until after settlement on his new home, to ensure he has enough money to purchase, furnish and move in.
In October 2024 Ben applies for and we grant an extension until 1 February 2025 to make the contribution. This allows Ben enough time to settle and move into his new home, and then contribute the money remaining from his sale.
End of example
Example: extension of time to make a contribution not granted
In January 2024 Rebecca turned 54 years old. She and her husband James decide to sell their family home which they have lived in for 30 years. James is 60 years old.
The sale and settlement occur in July 2024. Rebecca applies for an extension of time to make her contribution, as it is more than 90 days from the date of settlement until she turns 55 years old and so would qualify.
We don't grant the extension of time.
The sale, settlement, and 90-day period all occurring before Rebecca was eligible to make a Downsizer contribution was not a reason to extend the time. Note: If settlement occurred in December 2024, Rebecca would be eligible to contribute once she turned 55 years old in January 2025, and within 90 days of settlement.
Instead, Rebecca decides to make a non-concessional super contribution using the sale proceeds. The contribution counts towards her non-concessional contributions cap.
James is eligible to make a Downsizer contribution to his super fund.
End of example