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Downsizer contributions - access age reduced to 60


In brief

  • Applies from 1 July 2022
  • Access Age for downsizer contributions will be age 60 (currently age 65)
  • No change in the other qualifying conditions - such as
      - 10 years ownership condition
      - $300,000 cap on Downsizer Contribution
      - 90 day time limit in which to make the downsizer contribution
  • Will benefit individuals who don’t want to wait until they attain age 65 to use the downsizer contribution strategy

Now the details

Downsizer contributions were introduced in July 2018 to permit individuals who may otherwise have been prevented from making non-concessional contributions by their age or contribution cap limits to transfer the proceeds from the sale of their home into the superannuation system.  Downsizer contributions are not subject to the age or work test tests which apply to other non-concessional contributions and also not subject to the non-concessional contribution cap.

While there are a number of requirements for a contribution to be treated as a downsizer contribution, in broad details, the principal requirements are that:

  • the contributor, if making the contribution for their spouse, then the spouse must have attained age 65 (age 60 from 1 July 2022)
  • the contributor, if making the contribution for themselves, then the contributor must have attained age 65 (age 60 from 1 July 2022)
  • the maximum amount of the downsizer contribution for any individual cannot exceed $300,000
  • the maker of the contribution must have sold an Australian dwelling which qualified them for the principal private residence exemption
  • the dwelling must have been owned by them for 10 or more years
  • the contribution must be made within 90 days of the sale of the dwelling
  • Downsizer contributions for an individual can only be sourced from the sale proceeds of one designated dwelling and they cannot exceed the sale proceeds arising from the sale of that designated dwelling.

Now the nerdy stuff

The change will be effected by amending paragraph 292-102(1)(a)) of the Income Tax Assessment Act 1997 by substituting 60 for 65.  The change is achieved by Schedule 23 to the Amendment Act.