Contributing the Proceeds of Downsizing your Home into Superannuation
On 9 May 2017 the Government announced that from 1 July 2018, individuals aged 65 or over will be able to make a contribution to super of up to $300,000 from the proceeds of selling their home. This legislation has now passed both houses and is awaiting royal assent.
These contributions will not count towards the concessional or non-concessional contribution caps and the individual making the contribution will not need to meet the existing maximum age, work or $1.6m balance tests for contributing to super.
The home sold must have been owned by the individual for the past ten or more years and was the principal residence of the individual.
Both members of a couple can contribute to super from the proceeds of the sale. This means, a couple could potentially contribute up to $600,000 into super using this strategy.
This strategy is beneficial for retirees who can top up their superannuation / pension balances and invest their savings into a 0% tax (Pension Phase) or worst case 15% tax (Accumulation Phase) environment.
Note that this measure will come into effect from 1 July 2018 and is based on the contract date not the property settlement date.
If you are interested in discussing this strategy or your retirement planning in general please contact our Financial Planning Team.