- Budget confirms leak ahead of formal announcement
- Downsizer contributions will be permitted for those aged at least 60
- The change is likely to take start on 1 July 2022
The Federal Budget papers confirm the leak that the downsizer contributions eligibility will be expanded.
Quick re-cap on the existing rules
- Those aged at least 65 can access the downsizer contribution opportunity
- The maximum that can be contributed is $300,000 per person
- The contribution does not count towards the non-concessional contribution cap and a portion of it cannot be claimed as a personal super tax deduction
- It can be made if a person’s Total Super Balance is more than $1.6m
- It will form part of a person’s Transfer Balance Cap if it is used to commence a superannuation income stream
- It would count as an asset for the aged/veteran’s pension
- The contribution cannot be made unless the principal place of residence has been sold (after June 2018 and the sale has been finalised or settled) and the family home has been owned for at least 10 years by the person or their spouse – that is, the house is partially or fully exempt from CGT
- The house is in Australia and is not a caravan, houseboat or mobile phone
- The contributions must be made within 90 days of receiving the proceeds
- Downsizer contributions can only be made once
The only change to the above rules is that that downsizer contributions will be permitted for those aged at least 60.
The change will commence from the start of the first financial year after the enabling legislation receives Royal Assent. At this point, the government expects this to be from 1 July 2022 onwards.
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