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Downsizer super contribution

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Newbie

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We settled on the sale of our property on 4th July 2018. I assume we meet the date restriction for allowing fir a 'downsizer' super contribution?  Is that correct?

 

thanks

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Devotee Registered Tax Practitioner

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We settled on the sale of our property on 4th July 2018. I assume we meet the date restriction for allowing fir a 'downsizer' super contribution?  Is that correct?

 

Yes, but you need to meet all the conditions below.

This means that the super fund needed to receive the contribution, and the downsizer form, no later then 04/07/2018 + 90 days.

 

 

From ATO:

 

Eligibility for the downsizer measure

You will be eligible to make a downsizer contribution to super if you can answer yes to all of the following:

  • you are 65 years old or older at the time you make a downsizer contribution (there is no maximum age limit)
  • the amount you are contributing is from the proceeds of selling your home where the contract of sale exchanged on or after 1 July 2018
  • your home was owned by you or your spouse for 10 years or more prior to the sale – the ownership period is generally calculated from the date of settlement of purchase to the date of settlement of sale
  • your home is in Australia and is not a caravan, houseboat or other mobile home
  • the proceeds (capital gain or loss) from the sale of the home are either exempt or partially exempt from capital gains tax (CGT) under the main residence exemption, or would be entitled to such an exemption if the home was a CGT rather than a pre-CGT (acquired before 20 September 1985) asset
  • you have provided your super fund with the Downsizer contribution into super form either before or at the time of making your downsizer contribution
  • you make your downsizer contribution within 90 days of receiving the proceeds of sale, which is usually at the date of settlement
  • you have not previously made a downsizer contribution to your super from the sale of another home.

Note: If your home that was sold was only owned by one spouse, the spouse that did not have an ownership interest may also make a downsizer contribution, or have one made on their behalf, provided they meet all of the other requirements.

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Most helpful response

Devotee Registered Tax Practitioner

Replies 0

We settled on the sale of our property on 4th July 2018. I assume we meet the date restriction for allowing fir a 'downsizer' super contribution?  Is that correct?

 

Yes, but you need to meet all the conditions below.

This means that the super fund needed to receive the contribution, and the downsizer form, no later then 04/07/2018 + 90 days.

 

 

From ATO:

 

Eligibility for the downsizer measure

You will be eligible to make a downsizer contribution to super if you can answer yes to all of the following:

  • you are 65 years old or older at the time you make a downsizer contribution (there is no maximum age limit)
  • the amount you are contributing is from the proceeds of selling your home where the contract of sale exchanged on or after 1 July 2018
  • your home was owned by you or your spouse for 10 years or more prior to the sale – the ownership period is generally calculated from the date of settlement of purchase to the date of settlement of sale
  • your home is in Australia and is not a caravan, houseboat or other mobile home
  • the proceeds (capital gain or loss) from the sale of the home are either exempt or partially exempt from capital gains tax (CGT) under the main residence exemption, or would be entitled to such an exemption if the home was a CGT rather than a pre-CGT (acquired before 20 September 1985) asset
  • you have provided your super fund with the Downsizer contribution into super form either before or at the time of making your downsizer contribution
  • you make your downsizer contribution within 90 days of receiving the proceeds of sale, which is usually at the date of settlement
  • you have not previously made a downsizer contribution to your super from the sale of another home.

Note: If your home that was sold was only owned by one spouse, the spouse that did not have an ownership interest may also make a downsizer contribution, or have one made on their behalf, provided they meet all of the other requirements.

Devotee

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As Bruce4Tax has advised, the exchange of the sale contract needs to have happened on or after 1 July 2018.  This exchange of contract is the time when both parties sign the sale agreement and typically at or before the time when the deposit is paid. In nearly all cases htis is before the settlement day.  So if the contract was signed by both parties in June 2018 (or earlier), with settlement in July 2019 the seller would not be eligible for downsizer contribution.