Whilst the current malaise may suggest politician’s offer little to retirees, the 2017 Federal Budget offers an excellent opportunity to top up your superannuation balance during retirement. Passed in December 2017, the downsizer contribution legislation allows all Australian’s to get an extra $300,000 into superannuation tax-free regardless of whether their balance is above or below the $1.6m cap.

The strategy, which is available from 1 July 2018 is quite straightforward, with the details as follows:

  • The contributor: The person contributing must be over 65 years of age and there is no maximum age.
  • The home: To be eligible the proceeds must be received from the sale of your principal residence, be subject to the CGT exemption, and you must have owned the property for at least 10 years;
  • The contribution: The contribution must be made within 90 days of receiving the proceeds of your property sale;
  • The contribution cap: The cap or amount available to be contributed is the lesser of the proceeds of the sale or $300,000 per person.
  • Other caps: The contribution does not count towards the non-concessional or concessional caps and is not subject to the $1.6m total superannuation balance (TBC) cap.

Unfortunately, this strategy is only available once and cannot be applied to caravans, houseboats or other mobile homes. In order to be compliant, you must complete the downsizer contribution into super form and provide it to your accountant or the trustee of your fund.