Are Downsizer Contributions to Superannuation Worth It?


As of January 2023, those 55 years old and over can make a ‘downsizer’ contribution to their superannuation.

This type of contribution was introduced for people looking to sell their homes and get the most out of it. Now, with the lower age limit, more people have an opportunity to use this strategy to boost their retirement funds.

What is a Downsizer Contribution?

If you are 55 years or older, you can contribute up to $300,000 of the proceeds of the sale of your primary residence to your superannuation fund.

This contribution is not subject to the contribution caps, meaning that individuals can make these contributions even if they have reached their contribution cap limit for the financial year.

Furthermore, downsizer contributions are tax-free and are excluded from the existing age and work test, providing a significant advantage for individuals looking to increase their retirement savings.

For couples, both members can take advantage of the concession for the same home. If you and your spouse meet the other criteria, you can contribute up to $300,000 each ($600,000 per couple). This would still be the case even if one of you did not have an ownership interest in the sold property (assuming they meet the other criteria).

Sale proceeds contributed to superannuation under this measure count towards the Age Pension assets test. Because a downsizer contribution can only be made once in a lifetime, it is essential to ensure that this is the right option for you.

Benefits of Downsizer Contributions

The primary benefit of downsizer contributions is that they allow individuals to boost their superannuation balance and increase their retirement savings.

This is especially beneficial for individuals looking to downsize their homes, such as a middle-aged couple whose children are all grown up and have moved out of home.

To access this measure, you do not have to buy another house once you have sold your existing one, nor are you required to buy a specifically smaller one – you could buy a larger and more expensive one. Simply meet the eligibility criteria to place the maximum contribution toward the super fund from the proceeds of the sale.

Another benefit of downsizer contributions is that they are tax-free. This means that individuals can contribute up to $300,000 to their superannuation without having to pay any tax on the contribution. This provides a significant advantage for individuals looking to reduce their taxable income.

Is it worth it?

The answer to whether downsizer contributions are worth it in the current market depends on individual circumstances. Downsizer contributions can be a great option for individuals looking to sell their homes and increase their retirement savings.

However, it is important to consider other factors, such as your current financial situation, retirement goals, and overall financial plan.

Housing demand is up, and the market may mean you up-sell and pocket a lot of profit from your investment. But if you owe a lot of debt elsewhere or end up renting at a higher cost than your mortgage repayments were, then this contribution will not place you on better footing.

Only having the option to contribute in this manner once means you need to ensure you use it to the maximum extent for the most significant outcome if you are eligible.

Downsizer Contributions Eligibility Criteria:

  • You are 55 years or older (from 1 January 2023) at the time of making the contribution.
  • The home was owned by you or your spouse for 10 years or more prior to the sale – the ownership period is generally calculated from the date of settlement of purchase to the date of settlement of sale.
  • The home is in Australia and is not a caravan, houseboat, or other mobile home.
  • The proceeds (capital gain or loss) from the sale of the home are either exempt or partially exempt from capital gains tax (CGT) under the main residence exemption or would be entitled to such an exemption if the home was a post-CGT asset rather than a pre-CGT asset (acquired before 20 September 1985).
  • You provide your super fund with the Downsizer Contribution to Super Form (NAT 75073) either before or at the time of making the downsizer contribution.
  • The downsizer contribution is made within 90 days of receiving the proceeds of the sale, which is usually at the date of settlement.
  • You have yet to make a downsizer contribution to super from selling another home or from the part sale of your home.

Consider Your Financial Situation

Downsizer contributions to superannuation can be an excellent option for individuals over 55 years old looking to sell their homes and increase their retirement savings.

However, it is important to consider the impact of these contributions on your overall financial situation and retirement goals before making a decision.

If you would like to book a consultation and discuss if a Downsizer Contribution is good for you, please email us at


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