From 1 July 2018, people aged 65 and over will be able to sell the family home and make an after-tax contribution into their super of up to $300,000, or $600,000 for couples.
This new super rule could be the key for some seniors who want to downsize from their family home to something smaller and release equity to fund their retirement.
This measure applies to the sale of your dwelling (your home), which was your main residence and owned by you or your spouse for at least 10 years, and where the exchange of contracts for the sale occurs on or after 1 July 2018.
Your downsizer contribution will not count towards your contributions caps, and the age and work restrictions that currently apply to super contributions in the 65-75 age bracket will also not apply to these types of contributions. There is no maximum age limit.
While acknowledging the intent of the new super rules, seniors need to consider the broader financial and social implications of downsizing, any possible tax or social security repercussions, and the ability to receive a pension from your super fund.
The new rules and implications have many complexities so early planning and discussions are essential.
How can we help?
If you are interested in the downsizer contributions measures, please feel free to give our office a call to arrange a time to meet so that we can discuss your particular requirements in more detail.
Any information provided in this news item is purely factual in nature and does not take into account your personal objectives, situation or needs. The information is objectively ascertainable and is not intended to imply any recommendation or opinion about a financial product. This does not constitute financial product advice under the Corporations Act 2001 (Cth). It is recommended that you obtain financial product advice before making any decision on a financial product such as a decision to make contributions to your superannuation fund. Please contact us if you would like to obtain financial product advice.