You may have heard of downsizing before, which is when you move from a larger home into a smaller one that suits you better at a different stage in your life.
Now there is a new category of superannuation contributions. It’s called Downsizing Superannuation Contribution. It allows older Australians to contribute more to their superannuation fund simply by downsizing from a larger home into a smaller one. The scheme will be open to take contributions for the sale of a home on or after 1 July 2018.
The ATO has developed particular eligibility criteria to participate in this new super contributions scheme which include:
- your age
- the timing of the sale of your dwelling (your home)
- the type of your dwelling
- how long you’ve owned your home
- your Capital Gains Tax situation for the sale of your home
- when you submit your downsizing contribution to the super fund
Before you consider participating in this scheme you should approach your Financial Planner to help you analyse your complete financial situation, as going down this path could jeopardise your eligibility for the age pension.
For more information visit the ATO website
If you are experiencing changes in your retirement circumstances and want to find out more about whether this scheme would suit you, feel free to contact us on 1300 416 590.