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Downsizing Contribution of up to $300000 into Super

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Newbie

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Do couples need to be aged 65+ when their settlement goes through after selling their family home in order to be eligible for the $300000 each contribution into super?

For example, I am the owner on the title of our house and am aged 62, my husband is 65.  Do we need to ensure that I am at least 65 when the settlement date happens, because there is only 90 days' time after that to contribute into super?

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Anonymous

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Hi @KF 

 

As you may be aware you can make a downsizer contribution into super if you meet all of the Eligibility criteria;

  • 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.

 

For you this means it does not make any difference when the house is sold, so long as you are at least 65 years old when you make the downsizer contribution, which must be made no later than 90 days (or such longer time as the ATO allows) of receiving the funds, which is usually the settlement date.

The ATO upon request may allow a period longer than 90 days in which to make the contribution, which means that you can apply to the ATO for an extension of time .  Refer to ATO Law Companion Ruling  LCR 2018/9  paragraph 81 and Paragraph 292-102(1)(g) of the Income Tax Assessment Act 1997.

 

For your spouse whom is already at least 65 years old, if they meet all the other eligibility criteria, they can make up to $300,000 downsizer contrbition, even if you can not because you do not qualify (i.e. you are not at least 65 years old).   So long as they are your spouse, it does not make any difference that they are not an owner of the property.    Refer to ATO Law Companion Ruling  LCR 2018/9  paragraph 17 and Paragraph 292-102(1)(c) of the Income Tax Assessment Act 1997. 

 

If you need further assistance you can contact the ATO super team on SuperAdvice@ato.gov.au or for general super information phone 13 10 20   8.00am and 6.00pm - local time - Monday to Friday, except public holidays.

 

 

2 REPLIES 2

Most helpful response

ATO Certified Response

Anonymous

Replies 1

Hi @KF 

 

As you may be aware you can make a downsizer contribution into super if you meet all of the Eligibility criteria;

  • 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.

 

For you this means it does not make any difference when the house is sold, so long as you are at least 65 years old when you make the downsizer contribution, which must be made no later than 90 days (or such longer time as the ATO allows) of receiving the funds, which is usually the settlement date.

The ATO upon request may allow a period longer than 90 days in which to make the contribution, which means that you can apply to the ATO for an extension of time .  Refer to ATO Law Companion Ruling  LCR 2018/9  paragraph 81 and Paragraph 292-102(1)(g) of the Income Tax Assessment Act 1997.

 

For your spouse whom is already at least 65 years old, if they meet all the other eligibility criteria, they can make up to $300,000 downsizer contrbition, even if you can not because you do not qualify (i.e. you are not at least 65 years old).   So long as they are your spouse, it does not make any difference that they are not an owner of the property.    Refer to ATO Law Companion Ruling  LCR 2018/9  paragraph 17 and Paragraph 292-102(1)(c) of the Income Tax Assessment Act 1997. 

 

If you need further assistance you can contact the ATO super team on SuperAdvice@ato.gov.au or for general super information phone 13 10 20   8.00am and 6.00pm - local time - Monday to Friday, except public holidays.

 

 

Newbie

Replies 0

Thanks for your reply/answer, as the Fact Sheet from the ato website doesn't spell this out too clearly.