Unlock the benefits of downsizer super contributions

Are you nearing retirement and looking for ways to boost your superannuation savings? Downsizer super contributions might be the perfect solution for you! This unique opportunity allows eligible Australians aged 55 and over to contribute the proceeds from selling their home into their superannuation fund. Not only does this help you maximise your retirement savings, but it also offers potential tax benefits and financial flexibility.

In the 2024–2025 financial year alone, a remarkable 15,800 individuals took advantage of this strategy, contributing a total of $4.165 billion to their superannuation funds. On average, individuals contributed around $263,000 to $266,000. This growing trend highlights the popularity and effectiveness of downsizer contributions as a means to secure a comfortable retirement.

We’ll explore the ins and outs of downsizer super contributions to provide you with all the information you need to get started.

What are downsizer contributions?

A downsizer contribution allows an eligible individual to contribute an amount equal to all or part of the sale proceeds (up to $300,000 each) from the sale of their home into their superannuation fund. The contribution must not exceed the sale proceeds of the home.

The great advantage is that downsizer contributions are not restricted by any other contribution caps or your total superannuation balance; there are no work tests; and there is no upper age limit. It’s one of the rare ways you can contribute large amounts to your super even after the age of 75. 

Downsizer contributions can also be used alongside other strategies. For example, someone under age 75 can potentially combine the following three strategies to contribute up to $690,000 to super in a single year, if eligible and if timed correctly:

• a $300,000 downsizer contribution; and
• up to $360,000 of personal after-tax contributions under the “bring-forward rule”; and 
• up to $30,000 of personal deductible contributions.

Eligibility checklist

To make a downsizer contribution, you must:

• be 55 years or older at the time of contribution;
• have owned the home for 10 years or more (the owner can be you or your spouse);
• sell your home that is in Australia and is not a caravan, houseboat or mobile home;
• ensure the sale is exempt or partially exempt from CGT for you under the main residence exemption;
• make the contribution within 90 days of receiving the sale proceeds (usually settlement date);
• not have made a downsizer contribution previously from another home; and
• provide your super fund with the Downsizer contribution into super form (NAT 75073) either before or at the time of making the contribution.

Don’t forget the form!

Failure to submit the Downsizer contribution into super form on time may result in your fund rejecting the contribution or treating it as a standard non-concessional contribution, which could have adverse tax implications.

Timing is critical

The 90-day deadline from the date of settlement is strict. If you need more time (eg due to delays in purchasing a new home), you must apply to the ATO for an extension. Extensions are granted only in limited circumstances, such as settlement delays due to council approvals.

Seek advice

As always, seek professional advice to ensure this strategy is suited to your circumstances. An adviser can help explain the rules for specific circumstances, such as when a previous main residence has become your investment property or where you plan to apply for a social security benefit (your main residence is not counted for Centrelink means testing, but amounts in super accumulation are generally tested from the age of 67). 

Source: www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/growing-and-keeping-track-of-your-super/how-to-save-more-in-your-super/downsizer-super-contributions 
www.ato.gov.au/about-ato/research-and-statistics/in-detail/super-statistics/downsizer-super-contributions-data