Timing is important! A sale of your Principal Place of Residence after 1 July 2018 can provide you with an opportunity to boost your Superannuation balances.

From 1 July 2018, individuals 65 or over will be able to make an additional contribution to their superannuation of up to $300,000 from the proceeds of selling their home.

The recent superannuation reforms have meant individuals are looking for ways in which they can boost their superannuation balance and not be limited by the introduction of the changes. 

Some interesting thoughts

A number of the hurdles that may ordinarily prevent you from contributing have been removed when using the ‘downsizing’ opportunity.  You are not required to meet the work test, you can be over 75 years old, and the amount is not included in your non-concessional contribution limits.  You can even make the contribution if you have a total balance of greater than $1.6m in superannuation.

You actually don’t even need to downsize.  The provision applies upon the sale of your residence – it does not require you to buy a smaller home, or for that matter, any home at all.  Accordingly, you could utilise this opportunity to boost your superannuation when moving to a larger home, a new home, into a rental arrangement, move in with your kids, or even into a retirement home.

Should your home be in joint names, both members of the couple can make the ‘downsizing contribution’ to super, thus allowing up to $600,000 to be added to your retirement savings.

Some caution should be taken, however, if social security is relevant.  Your home is exempt from social security testing, but cash obtained from the sale (including the amount contributed to super) may become subject to assessment.