A More Comfortable Retirement Lifestyle Awaits You — The Downsizer Contribution

You may have heard about the new downsizing into superannuation measure announced in the 2017–18 Budget. While intended as a pressure-reducing measure on housing affordability for young Australians struggling to enter the property market, the knock-on effects for Australian seniors are not to be overlooked. Essentially, if you’re 65 or older and meet the eligibility requirements, you can choose to make a ‘downsizer contribution’ into your superannuation fund.

This is a great opportunity to make a one-off, non-concessional contribution to your super from the proceeds of selling your home that could help to make your retirement more comfortable. This came into effect on 1 July 2018, so if you’re considering downsizing to a smaller, more manageable home, perhaps under a land lease model, there’s no better time to do so than now.


The downsizer contribution is a non-concessional superannuation contribution that won’t affect your superannuation contributions cap — even if your super balance is more than $1.6 million. It will, however, count towards your transfer balance cap and total super balance at the end of the financial year (2018-19).

If you’re to make the downsizer contribution work for you and ensure you’re not trapped in an “asset rich, income poor” situation as many older Australians have found themselves, there are a few things to take into consideration.

First, there’s the question of eligibility. Before you rush into putting your house on the market, you must make sure that you’re eligible. Second, you need to explore your downsizing options, like an over-50s lifestyle community under a land lease model. And third, there’s also the matter of timing. Taking into account the eligibility requirements and availability of suitable downsizing options, the time may not yet be right for you to take advantage of this fantastic opportunity. But that doesn’t mean you shouldn’t start looking into your eligibility and downsizing options now.

Like all major decisions in life, the downsizer contribution measure isn’t something to rush into, but it’s certainly something to consider if you’re looking for a more comfortable lifestyle in retirement. Many Australian seniors will be looking to leverage it to their advantage, and if you meet the broad eligibility requirements and yearn for the retirement lifestyle you know you deserve, there’s no reason why you shouldn’t leverage it to your advantage either.


There are a number of eligibility requirements to meet if you’re to qualify for the downsizer contribution measure, so speak with an ATO (Australian Tax Office) representative or your financial advisor before putting plans in place. The ATO has already provided some information on eligibility, so if you answer ‘Yes’ to all of the following questions, you should be eligible.

  • Were you 65 years old or older at the time of making a downsizer contribution?
  • Is the amount you’re contributing from the proceeds of selling your home?
  • Was the contract of sale on your property exchanged on or after 1 July 2018?
  • Did you or your spouse own your home for 10 years or more prior to the sale?
  • Is your home in Australia and not a mobile or relocatable home, like a caravan?
  • Are the proceeds from the sale of your home exempt from capital gains tax (CGT)?
  • Did you provide your super fund with the Downsizer contribution into super form before or at the time of making the downsizer contribution?
  • Is this is the first time you’ve made a downsizer contribution to your super from the sale of a home? (You can only make a downsizer contribution from the proceeds of the sale of one property.)

Additionally, you will need to make the downsizer contribution to your super fund within 90 days of receiving the proceeds of the sale of your home. This usually occurs at the date of settlement, so you must be certain that you can make your contribution within that time frame. However, if circumstances which are out of your control prevent you from making your downsizer contribution on time, you can apply for an extension from the ATO.


Making a downsizer contribution is easy — once you’ve confirmed that you meet the eligibility requirements:

  • Contact your superannuation fund to check if they accept downsizer contributions. If they don’t, you will need to open a new account with a super fund that does.
  • Download and complete the Downsizer contribution into super form. You will need to submit it to your super fund before or when making your contribution.
  • Make the contribution within 90 days of receiving the proceeds of the sale of your home.

It really is that easy to take advantage of this great opportunity to make a non-concessional contribution into your superannuation fund. However, as making a large super contribution could affect your eligibility to receive age pension payments, we advise seeking independent financial advice.

If you have any questions about making a downsizer contribution or our over 50s lifestyle community in Morayfield, Queensland, please don’t hesitate to contact Affinity Lifestyle.

Helpful Links:

Downsizing contributions into superannuation

Downsizing contribution into super form

Non-concessional contributions

Total superannuation balance

Main residence exemption

Transfer balance cap

Register to receive an emailed brochure