This year’s Federal Budget announced a new measure to help encourage older people to downsize from homes that no longer meet their needs.
From 1 April 2018, those aged 65 years and over will be able to make an additional non-concessional contribution of up to $300,000 from the sale proceeds of their principal residence that has been owned for 10 years or more. Both members of a couple can contribute to super under this policy from the proceeds of the sale, i.e. $600,000.
These contributions will not count towards the non-concessional contributions cap and the individual making the contribution will not need to meet the existing maximum age, work or $1.6m balance tests.
For example, Bob and Sarah, both retired and aged 76 and 79, sell their home. The sale proceeds are $1.5 million. They can both make a non-concessional contribution into superannuation of $300,000 ($600,000 in total), even though Sarah no longer satisfies the standard contribution work test and George is over 75. They can make these contributions regardless of how much they already have in their accounts.