Brealey Quill Kenny Accountants, Canning Vale – Downsizer Contribution on the Sale of a Dwelling

As announced in the 2017-18 Federal Budget, the Australian Government has introduced the Downsizer Measure allowing those aged 65 or over to top up their superannuation as a result of downsizing their home. This measure allows individuals to make a tax free contribution of up to $300,000 (or $600,000 per couple) from the sale of their dwelling.

There are currently restrictions on how much an individual can contribute to super, however please note, the Downsizer Measure does not affect these caps.

Although this is referred to as the “Downsizer Measure”, you don’t have to move into a smaller home! An individual can move into any living situation that is suitable for them, including but not limited to the following: the house next door, a retirement community, renting or living with family.

To find out if you are eligible for the Downsizer Measure, Brealey Quill Kenny have prepared a list of guidelines which all need to apply:

  • You are aged 65 years or older
  • The contract of sale is dated on or after 1 July 2018
  • On sale of the home, you or your spouse owned the home for at least 10 years or more
  • The dwelling is not a caravan, houseboat or other mobile home
  • The sale proceeds are either exempt or partially exempt:
    • 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)
  • Your superfund received a “Downsizer Contribution Form ” from you before or at the time of making your contribution
  • The contribution is made within 90 days of receiving the sale proceeds
  • You have not previously made a downsizer contribution for another home
To tie this altogether, take the following as an example:
Jack and Jill are a very happy couple who have lived in their family home for over 25 years located in Canning Vale, Western Australia. They are now aged 65 and have decided to downsize their home as their kids have all left the nest and it is just too big for the two of them.

Their family home was sold during July 2018 for $600,000. Jack and Jill have decided to utilise the Downsizer Measure allowing each spouse to contribute $300,000 to their super fund. At the time of the contribution, Jack and Jill also prepared the Downsizer Contribution Form with the help of their local accountant and sent this to their superfunds. They are now enjoying their smaller home and the boost in their superfund savings!

Please contact Brealey Quill Kenny on (08) 9256 2777 if you wish to speak with or see an accountant about downsizing your home.  We are located at Market City Commercial Centre, 6/280 Bannister Rd, Canning Vale WA 6155.

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