Downsizer Contributions Explained: Selling the Family Home and Super

What a downsizer contribution is

It is a one-off contribution to super made from the proceeds of selling an eligible home you have owned for at least ten years. It does not count against the usual contribution caps and does not require a work test.

There is a maximum amount per person, and couples can each contribute from the same sale if both are eligible. The contribution must generally be made within 90 days of settlement.

Eligibility basics

There is a minimum age, which has changed several times, so confirm the current threshold with the ATO. The property must be in Australia, must have been owned for at least ten years, and must qualify at least partly for the main residence capital gains exemption.

You do not actually have to buy a smaller home — despite the name, there is no requirement to purchase another property at all.

The Age Pension catch

This is the part most often missed. The family home is generally exempt from the assets test; money in super or the bank is not. Turning an exempt asset into an assessable one can reduce or end an Age Pension entitlement.

Running the numbers on both sides — investment return and pension impact — before selling is the practical step.

Other considerations

Moving costs, stamp duty on a new purchase, agent fees and the emotional cost of leaving a long-term home all belong in the calculation. So does whether the new home suits you for the next twenty years, not just the next two.