Retirement
10 things to know about downsizer contributions
Australians will be able to contribute certain proceeds from home sales to their superannuation from 1 July, but there are a number of factors to consider.
10 things to know about downsizer contributions
Australians will be able to contribute certain proceeds from home sales to their superannuation from 1 July, but there are a number of factors to consider.
According to special counsel, superannuation at SUPERCentral Michael Hallinan, there are at least 10 conditions those considering downsizing should be aware of.
In addition to a maximum $300,000 individual cap, older Australians need to meet these conditions:
1. While the contribution can be made even if a total super balance exceeds $1.6 million, the additional contributions cannot increase the transfer balance account.
2. “You must sell a current or former principal place of residence on or after 1 July 2018 (i.e. exchange contracts on or after 1 July 2018),” Mr Hallinan said.
3. The property needs to be located in Australia and cannot be a mobile home, caravan or houseboat. Additionally, prospective sellers need to have owned the home for at least 10 years.
4. However, while the house needs to have been a principal place of residence at some point in the buyer’s life, it doesn’t need to be the principal place of residence immediately before the sale.
5. The contribution to superannuation needs to be made within 90 days of settlement.
6. The downsizer contribution is available only to those 65 and over. However, it can still be made “even if you are over age 75 and do not satisfy the work test”.
7. Additionally, if a prospective seller is making the contribution on the behalf of a spouse, the spouse also needs to be at least 65.
8. “The source of the contributions for downsizer contributions must be one current or former residence: all downsizer contributions for one individual must be made from the same property,” Mr Hallinan continued.
9. “However, you may have one residence from which your downsizer contributions are sourced and your spouse may make their downsizer contributions from another property.”
10. Finally, Mr Hallinan noted that any unused portion of the downsizer contribution cap “unfortunately” cannot be transferred to a partner.
Superannuation
Aware Super takes on Australia's gender retirement gap, aiming for financial equality
Aware Super, one of Australia's largest superannuation funds with a 70 per cent female membership, is on a mission to close the gender gap that sees women retire with 30 per cent less super than men ...Read more
Superannuation
Age Pension increase prompts Australians to review their finances
The increase in the Age Pension, which takes effect today, should serve as a prompt for many older Australians to ensure they're maximizing their income as cost-of-living pressures persist, according ...Read more
Superannuation
Retirement reimagined as Australian optimism meets inflation worries in 2023 super fund insights
The latest reports on retirement confidence among Australians present a spectrum of sentiments, with fresh data revealing surprising optimism in some quarters while exposing underlying concerns in ...Read more
Superannuation
Aussie retirees face a shortfall as ideal retirement nest egg doubles what super will deliver
As Australians look towards retirement, the desired superannuation balance that many believe will ensure a comfortable retirement has significantly outpaced what they are on track to actually save. Read more
Superannuation
Super funds eye 6.5% return in 2023, despite a rocky start
As the year draws closer to its climax, Chant West unveils its projection for super funds in what can only be described as a year of economic ebbs and flows. Read more
Superannuation
A deep dive into Australia’s superannuation system
Australia has a robust retirement savings system known as superannuation designed to provide financial security to Australians in their post-work years. Read more
Superannuation
50,000 super fund members impacted by data breach
Around 50,000 member records were impacted by the breach that took place earlier this month. Read more
Superannuation
Two super funds tipped to reach $1tn by 2040
KPMG has released the findings from a new review. Read more
Superannuation
Aware Super takes on Australia's gender retirement gap, aiming for financial equality
Aware Super, one of Australia's largest superannuation funds with a 70 per cent female membership, is on a mission to close the gender gap that sees women retire with 30 per cent less super than men ...Read more
Superannuation
Age Pension increase prompts Australians to review their finances
The increase in the Age Pension, which takes effect today, should serve as a prompt for many older Australians to ensure they're maximizing their income as cost-of-living pressures persist, according ...Read more
Superannuation
Retirement reimagined as Australian optimism meets inflation worries in 2023 super fund insights
The latest reports on retirement confidence among Australians present a spectrum of sentiments, with fresh data revealing surprising optimism in some quarters while exposing underlying concerns in ...Read more
Superannuation
Aussie retirees face a shortfall as ideal retirement nest egg doubles what super will deliver
As Australians look towards retirement, the desired superannuation balance that many believe will ensure a comfortable retirement has significantly outpaced what they are on track to actually save. Read more
Superannuation
Super funds eye 6.5% return in 2023, despite a rocky start
As the year draws closer to its climax, Chant West unveils its projection for super funds in what can only be described as a year of economic ebbs and flows. Read more
Superannuation
A deep dive into Australia’s superannuation system
Australia has a robust retirement savings system known as superannuation designed to provide financial security to Australians in their post-work years. Read more
Superannuation
50,000 super fund members impacted by data breach
Around 50,000 member records were impacted by the breach that took place earlier this month. Read more
Superannuation
Two super funds tipped to reach $1tn by 2040
KPMG has released the findings from a new review. Read more