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New downsizer age threshold coming

New downsizer age threshold coming

During the 2022 Federal election, the government announced that it would support a further reduction to the downsizer contribution eligibility age from 60 to 55 years.

Legislation has since been introduced to Parliament to decrease the age to 55. While this is not law yet, it is important to be aware of the opportunities available if you are considering selling your main residence and are between the ages of 55-59 or coming close to age 55. This is because the downsizer contribution allows those that would not usually be eligible to contribute into super to do so. The other eligibility rules will remain unchanged and are outlined below:

  • You have reached the eligible age at the time you make a downsizer contribution. This is currently age 60 and there is no maximum age limit.
  • Your home was owned by you or your spouse for 10 years or more prior to the sale – the ownership period is calculated from the date of settlement of purchase to the date of settlement of sale.
  • Your home is in Australia and is not a caravan, houseboat, or other mobile home.
  • The proceeds (capital gain or loss) from the sale of the home are either exempt or partially exempt from capital gains tax (CGT) under the main residence exemption, or would be entitled to such an exemption if the home was a CGT rather than a pre-CGT asset (acquired before 20 September 1985).
  • You make your downsizer contribution within 90 days of receiving the proceeds of sale, which is usually at the date of settlement (and you have provided the downsizer form to your Fund prior to, or at the time of making the contribution).
  • You have not previously made a downsizer contribution to your super from the sale of another home or from the part sale of your home.

We will keep you updated as the bill progresses.

If you have any questions or would like to learn more about how the changes could impact, please reach out to your Pitcher Partners expert today.

This content is general commentary only and does not constitute advice. Before making any decision or taking any action in relation to the content, you should consult your professional advisor. To the maximum extent permitted by law, neither Pitcher Partners or its affiliated entities, nor any of our employees will be liable for any loss, damage, liability or claim whatsoever suffered or incurred arising directly or indirectly out of the use or reliance on the material contained in this content. Pitcher Partners is an association of independent firms. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities. Liability limited by a scheme approved under professional standards legislation.

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