Downsizer contributions

Downsizer contributions are a way for people aged 55 or over to boost their total superannuation balance. If you sell your home, you can use the sale proceeds to make a contribution to your super account. This is called a downsizer contribution.

The downsizer contribution is an after-tax contribution, meaning the initial payment is tax-free. And despite its name, there's no requirement to purchase another home. Contributions to your super account must be made within 90 days of settling your property sale.

To be eligible for the downsizer contribution, you will need to meet all of the following criteria:

• Be at least 55 years old
• you or your spouse owned your Australian home¹ for at least 10 years
• this is your first (and only) time making a downsizer contribution to your super.

¹ For the purpose of downsizer contributions, ‘home’ does not include a caravan, houseboat or other mobile home.

A downsizer contribution provides an opportunity for people who might otherwise be ineligible to contribute to super due to their financial situation or age.

Some of the benefits include:

• Concessional or non-concessional contribution caps don’t apply — The downsizer contribution payment doesn’t count towards any of your concessional or non-concessional contribution caps, so it can still be made even if you have super savings greater than $1.9 million.
• No age limits — While people over 75 are usually restricted from making super contributions, there is no upper age limit for downsizer contributions.
• Couples can apply — Even if ownership of the home wasn't shared, your spouse is also able to apply, meaning you could contribute a maximum of $600,000 per couple.

Property sale

The sale proceeds can be from your current home, family home or investment property, but you must have owned the residence for at least 10 years.

To be able to make a downsizer contribution, you need to be exempt or partially exempt from capital gains tax (CGT) on the sale of your home under the “main residence” provision. 

Whether you're fully or partially exempt from CGT, this indicates the property was your primary residence for at least some time during its ownership.

Multiple downsizer contributions

A maximum of $300,000 per person in a couple can be used as a downsizer contribution.

Each member of a couple can reach that maximum, but the contributions must be made to their individual super accounts (not $600,000 to one spouse's account).

Annual contribution limits apply to both before-tax (concessional) and after-tax (non-concessional) contributions made to your super.

For full details, please see our fact sheet Opportunities and limits for super contributions

Contribution within 90 days

After selling your home, you'll have 90 days from the date you receive the proceeds (usually the date of settlement) to make a downsizer contribution to your super.

You can make your contribution in instalments, as long as the total:

• is funded only from the sale of your home
• doesn't exceed $300,000 per person
• is contributed within the 90-day timeframe.

If you’re thinking about making a downsizer contribution, there are some important factors to consider.

Downsizer contributions:

• are not tax-deductible
• will be taken into account in working out your eligibility for the government age pension, potentially resulting in your ineligibility
• will not affect your total super balance⁴ until it is re-calculated to include all your contributions on 30 June at the end of the financial year.
• are a once-off option and don’t count towards the sale of any residences in the future.

⁴ Your total super balance is generally the total value of your super interests in both accumulation phase and retirement phase at the end of the previous financial year, noting that:

• for accumulation phase, this is generally the withdrawal value at 30 June
• for the retirement phase, this is the balance of your personal transfer balance cap which is managed by the Australian Taxation Office (ATO).

You can view your total super balance through your ATO linked account by logging into your mygov account.

When making a downsizer contribution, you need to complete the ATO Downsizer contribution form. If making multiple contributions, you must provide a form for each contribution and submit within 90 days of receiving the proceeds of sale (unless an extension has been given).

To make a downsizer contribution to your NGS Accumulation account:

1. Make sure you’re eligible by checking above and ensuring you understand the rules explained on this page.
2. Complete the Downsizer contribution form available at the ATO website.
3. Send your completed form to us, along with a completed Lump sum contribution form.

Remember, downsizer contributions must be made within 90 days of receiving the sale proceeds (usually the date of settlement).