- If you are aged 55 or over;
- Looking to sell your primary residence that you have owned for more than ten years.
You may be able to contribute up to $300,000 per person from the sale proceeds into your superannuation under the downsizer contribution rules.
This strategy allows eligible Australians to boost their retirement savings without impacting their standard contribution caps — even if their super balance already exceeds the usual transfer balance limits.
Importantly, the property:
- Must be located in Australia
- Must have been owned by you or your spouse for at least 10 years
- Must qualify for a full or partial CGT main residence exemption
You do not need to be living in the property at the time of sale, provided it has qualified as your main residence at some point during ownership.
Benefits of the contribution:
✔ Contribute Outside Normal Caps
Downsizer contributions do not count towards concessional or non-concessional contribution caps.
✔ No Work Test Required
There is no requirement to meet the work test.
✔ Available Even With High Super Balances
Unlike other contribution types, downsizer contributions are not restricted by your total super balance.
✔ Significant Contribution Potential
You can contribute up to $300,000 each (up to $600,000 per couple), limited to the gross sale proceeds.
✔ Retirement Planning Flexibility
This strategy can assist with tax planning, wealth transfer, and the improvement of retirement income streams.
Key Eligibility Requirements
To qualify, you must:
- Be 55 years or older at the time of contribution
- Have owned the property (or your spouse has) for at least 10 years prior to sale
- Sell a property located in Australia
- Ensure the sale qualifies for at least a partial main residence CGT exemption
- Make the contribution within 90 days of receiving the sale proceeds
- Provide your super fund with the approved ATO Downsizer Contribution Form before or at the time of contribution
- Have not previously made a downsizer contribution
Common Misconceptions
Does the property need to be fully CGT exempt?
No. A full exemption is not required. A partial main residence exemption may still qualify.
Do I need to be living in the property at settlement?
No. The property does not need to be your principal residence at the time of sale.
Can only the owner contribute?
Not necessarily. A spouse who is not on title may still be eligible, provided all other conditions are satisfied.
Can I contribute more than the sale proceeds?
No. The contribution is capped at the lesser of $300,000 per person or the gross sale proceeds.
Can I contribute part now and top it up later?
No.
Downsizer contributions can be made only once per person and must generally be made within 90 days of receiving the sale proceeds.
If you choose to contribute less than your maximum eligible amount (for example, $100,000 instead of $300,000), you cannot later return and contribute the remaining amount once the time limit has passed.
You may split the contribution into multiple payments, but they must all be made within the allowed timeframe.
Because this is a once-in-a-lifetime opportunity, it is important to consider the full contribution amount before proceeding.
Important Considerations
- Downsizer contributions are not tax-deductible
- Once contributed, funds remain subject to super preservation rules
- Contributions may impact Age Pension eligibility
- Vacant land generally does not qualify
- Pre-CGT properties have specific eligibility considerations
Professional advice is strongly recommended before proceeding.
We’re Here to Help
Downsizer contributions can be a valuable retirement planning tool when structured correctly.
If you are considering selling your home and would like to explore whether a downsizer contribution suits your circumstances, please contact our team for tailored advice.
Some examples from the Australian Tax Office
(Assuming all other eligibility requirements are met — including age 55+, 10-year ownership and contribution within 90 days of settlement.)
Contribution of maximum amount
Each spouse can contribute up to $300,000 to super (a total of $600,000), as this does not exceed the sale proceeds.
Contributions cannot exceed the total sale price
The maximum contribution they can make in total cannot exceed $400,000 in total.
They may split this however they choose — for example, $200,000 each, or $300,000 for Betty and $100,000 for Bruce.
When a property is owned by one spouse
Only John is on the title.
Provided both meet all eligibility requirements, both John and Fatima can make a downsizer contribution of up to $300,000 each.
Selling part of the ownership interest
As they each dispose of 25% of the property and receive $125,000 each, they may each make a downsizer contribution of up to $125,000 (being the amount of capital proceeds they personally received).
Downsizer contributions can only be made once per person from the disposal of an ownership interest in a qualifying home.
Sale proceeds less than $300,000 per person
Even though the maximum cap is $300,000, she can only contribute up to $250,000, as contributions cannot exceed the gross sale proceeds.
For more information, visit the ATO’s website.
Please get in touch with us if you would like advice concerning the above or if you have any questions.
