I have just turned 65 & my wife is in her 50s. We have an investment property that we have not lived in for over 20 years. We will probably sell that property soon and wonder if I can make the Downsizer contribution to my Super? We have no plans to move from our current home.
Hi @JohnCollins,
Absolutely!
The minimum age rule is 55, so that may apply for your wife to be able to contribute also. ๐
You've owned your home for at least 10 years, as stated. So as long as you meet the rest of the eligibility criteria, you should be sweet as.
The max you can put into your super is $300,000 per person, as long as the house sells for more than that. ๐ธ
You'll need to submit a downsizer contribution form to your superfund before or at the time you make your contribution. ๐ฌ
Hi @JohnCollins,
Absolutely!
The minimum age rule is 55, so that may apply for your wife to be able to contribute also. ๐
You've owned your home for at least 10 years, as stated. So as long as you meet the rest of the eligibility criteria, you should be sweet as.
The max you can put into your super is $300,000 per person, as long as the house sells for more than that. ๐ธ
You'll need to submit a downsizer contribution form to your superfund before or at the time you make your contribution. ๐ฌ
Hi John,
I think you're asking something I'd also like to be sure about before we sell a long term investment.
When you hold a house for 30 years, it is annoying to pay CGT on "half the gain" because (much!) less than half the gain is "profit". It is inflation (devaluation of money over time)
EG Buy $200k house in 1995. Live in then, rent it for decades. Sell $1.2m in 2025. "Profit" appears to be $1m.
You would pay tax on half the "gain" $500k, which pushes you into the 50c tax bracket, which means you pay $250k in CGT!!!
If we could contribute $300k x 1 or $300k x 2 (for wife) into SUPER via DOWNSIZER from the sale of a property held long term, and pay CGT on half the balance remainging, EG $400k, the tax would be $50k, which would make it much more interesting to sell.
But the way I think DS works is that $1m profit, ATO will take $250k, and of the $750k remaining, sure, you can contribute $300k x 2 to Super (not sure if at 15 per cent or tax free?) And keep the remaining $150k for spending money or contribute to Super (if you're under the thresholds) at 15 per cent.
But Downsizer is not incentivizing us to sell because there is not sufficient CGT concession for properties held long time. The apparent "gain" is large but it should not be taxable at the same rate as those who've held properties for 10 years. The 50 per cent CGT discount favours them but not those who've held properties for 30 years!
Hey @LollyP,
Just confirming you saw the reply from @TamaraATO on 28 August 2024. There's a link that takes you to an ATO page about downsizer super contributions.
Is there something in particular you're still unsure of?
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