In 2017, the federal government passed legislation that enabled those 65 years or older to make a “downsizer contribution” into their superannuation after selling their home.
The legislation enables home owners that are 65 years and older to place a non-concessional contribution of up to $300,000 from the sale proceeds of their current dwelling into their superannuation.
Both members of a couple aged over 65 are eligible to make a contribution, meaning a couple can contribute a combined sum of $600,000 to their super.
In order to be eligible, Australians over the age of 65 must have lived in the dwelling they intend to sell for at least 10 years and can only make contributions for sales that occurred after 1 July 2018.
The downsizer contribution is only valid for the sale of one home and cannot be used more than once.
The initiative forms part of the government’s package of reforms to reduce pressure on housing affordability in Australia and free up homes for younger, growing families.
According to the Minister for Housing and Assistant Treasurer, Michael Sukkar, older Australians downsizing from their family homes have now contributed $1 billion to their superannuation funds.
The minister revealed that 4,246 individuals have utilised the downsizer measure, with 55 per cent of contributions having been made by women and 45 per cent from men.
Individuals from every state and territory have made downsizer contribution, he noted, with NSW having the largest proportion of contributions (31 per cent), followed by Victoria (26 per cent) and Queensland (24 per cent).
Mr Sukkar said he was “pleased to announce” that contributions had reached $1 billion.
Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.