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Contributions From Downsizing Your Home – Here’s What To Know

Older Australians can contribute the sale proceeds of their home to their superannuation when downsizing.

From 1 July 2018, eligible individuals have been able to make a contribution to their super of up to $300,000 from the proceeds of the sale of their home. Fortunately, individuals are not required to purchase another home to access this measure.

Those aged 65 and over (prior to 1st July 2022 and then aged 60 & over after this date) must meet the following eligibility requirements to make downsizer contributions to their super:

  • the contract of sale must be exchanged on or after 1 July 2018;
  • an individual or their spouse has owned the home for 10 or more years before the date of settlement of the sale;
  • the home is located in Australia and is not a caravan, houseboat or other mobile homes;
  • the sale proceeds are exempt or partially exempt from CGT under the main residence exemption or entitled to an exemption if the home was a CGT rather than a pre-CGT asset.

If you meet the aforementioned requirements, you must make your downsizer contribution within 90 days of receiving the proceeds of the sale – usually the date of settlement. Additionally, you will need to provide your super fund with the downsizer contribution form either before or at the time of making your contribution.

Individuals can make multiple downsizer contributions as long as they do not exceed $300,000 or the total sale proceeds less any other downsizer contributions that have been made by a spouse.

It is important to note that you can only make a downsizer contribution to your super from the sale of a single home. Therefore, if you sell another home in the future and you have previously used the downsizer contribution, you will no longer be able to access this measure.

The downsizer measure is available for those with a total super balance greater than $1.6 million. It will not affect your total super balance until your total super balance is recalculated to include all your contributions, including your downsizer contributions, on 30 June (at the end of the financial year).


  • The measure will, however, count towards your transfer balance cap – set at $1.7 million. This cap affects you when you move your superannuation into the retirement phase.
  • The downsizer contribution will also be considered to determine age pension eligibility.
  • If you cannot make your contribution within 90 days of settlement due to factors outside of your control, you will need to apply for an extension of time with the ATO.
  • Contributions that are incorrectly declared eligible may be subject to false and misleading penalties.

Before making a downsizer contribution, ensure you meet the eligibility requirements, check that your super fund accepts downsizer contributions and that the contribution will not conflict with your future retirement plan, i.e., exceed the transfer balance cap or affect your eligibility for the age pension assets test.

If you’re someone who often finds it difficult to make large lump sum payments for goods or services, you may want to consider looking into “Buy Now Pay Later” services.

Buy now pay later essentially means that, rather than paying in a full lump sum payment for a product or services rendered, there may be an option to pay through instalments of a certain amount over a set period to make the sum of the full amount in total. This method should allow you to pay in full for the product or service without overly straining your finances – you pay back what you can, as agreed upon when you begin the buy now pay later service.

Some popular buy now pay later services include Afterpay, Zip Pay, Brightepay, and some credit card networks such as  Mastercard and Visa, can offer buy now pay later arrangements.

Though it can be a convenient, immediate solution, it may be challenging to juggle the necessary repayments with other financial commitments. It’s not always the most appropriate method for people, and you should bear in mind your situation and ability in paying back the amounts. 

Before you sign up, keep in mind: 

  • It becomes easier to overspend with buy now pay later services, so know your limits on what you can and can’t afford.
  • You will be charged fees and costs to use the service, which can add up to a princely sum in and of itself.
  • Keeping track of your payments can be tricky if you’ve signed up for multiple services.
  • It could affect your loan applications for a car or mortgage as lenders consider buy now pay later spending just as much as your credit score.
  • Late repayments can appear on your credit report, which affects your ability to borrow money in the future.
  • Layby can be a cheaper alternative to buy now pay later, with no account-keeping or late fees to consider

If you are someone who could make use of BNPL services, you may wish to:

  • Ensure that when using the BNPL service, you stick to a set limit on what you spend so that you can comfortably pay it back later. 
  • Aim only to have one BNPL account at a time to manage payments through, rather than confuse yourself with multiple payments across different providers.
  • Always budget for bills, loan payments and BNPL payments, and 
  • Rather than use your credit card for payments to your BNPL account, consider linking to your debit account instead.

If you would like assistance in planning your financial future, help in managing your budget or some friendly advice, see us for a chat about what we can do for you.


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John Briggs

Jane Noller has been my accountant for the last 15 plus years. I can testify to Jane’s professionalism and expeditious manner in dealing with the day to day issues that surrounds our business accounting.

John Briggs

Registered Building Certifier