Under this initiative, individuals who are 65 years or older may be eligible to make a downsizer contribution to their superannuation account of up to $300,000 from the proceeds of selling their home. The home must have been the individual's main residence for at least 10 years prior to the sale.
The benefits of a downsizer strategy include:
- Tax-free contributions: The contributions made from the sale of the home are exempt from capital gains tax and are not included in the age pension assets test.
- Boosting retirement savings: The contributions can help boost an individual's superannuation balance, potentially providing additional financial security in retirement.
- Downsizing benefits: The strategy can also provide the opportunity to downsize to a more suitable and potentially more affordable home, freeing up capital for other expenses.
It's important to note that there are eligibility criteria and rules around the downsizer strategy, including the need to make the contribution within 90 days of receiving the sale proceeds and the requirement to provide certain documentation to the superannuation fund. It's also important to seek financial advice before making any significant financial decisions, to ensure that the downsizer strategy is appropriate for individual circumstances and goals.