The ability to make ‘downsizer contributions’ effectively commenced on 1 July 2018, prompting the ATO to release further guidance with respect to this new superannuation contribution classification.
Editor: This new measure will be of most assistance for individuals approaching retirement, where they dispose of their family home to ‘downsize’ and they want to contribute part or all of the proceeds to superannuation.
Basically, these measures allow older Australians to make a downsizer contribution where:
• they are aged at least 65;
• there was consideration received for the disposal of an eligible Australian dwelling;
• the contract of sale for the property was entered on or after 1 July 2018;
• a superannuation contribution is generally made within 90 days of settlement;
• the contribution does not exceed the lesser of $300,000 and the proceeds received from the sale of the dwelling;
• an ownership interest in the dwelling had been held for at least 10 years (usually by the individual making the contribution or their spouse);
• either a full or partial CGT main residence exemption applies to the disposal of the dwelling;
• a choice to treat the contribution as a downsizer contribution is made in the approved form; and
• broadly speaking, it is the first downsizer contribution the taxpayer has made.
* * * Disclaimer: The information is sourced from NTAA. * * *
Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their circumstances.