The federal government has designed the downsizer contribution scheme to make it as attractive as possible for those who are eligible. Here are 5 benefits to consider: Tax-free top up: Downsizer contributions provide a taxfree way to boost your superannuation savings. Exempt from contribution caps: These contributions are not subject to the usual annual contribution caps, which means you can make a significant one-time boost to your super. No work tests or age limits: Downsizer contributions don’t require you to meet work tests and there’s no upper age limit. Couples get double the benefit: Both spouses can contribute up to $300,000, potentially adding a total of $600,000 to their superannuation balances – even if your home was only owned by one spouse. No impact to other contributions: Downsizer contributions can be made in addition to other concessional and non-concessional contributions.

If a downsizer contribution is a possibility for you, here are 5 limitations to consider: No personal tax deduction: Downsizer contributions can’t be claimed as a personal tax deduction so if you’re a high income earner, talk to your financial adviser. Included in your transfer balance cap: Downsizer contributions count towards your transfer balance cap – which is $2 million per person for the 2026 financial year. The transfer balance cap limits the amount you can move into the tax-free retirement phase, so if you think a downsizer contribution could bring you close to the cap, it’s important you talk to your financial adviser first. Centrelink implications: Adding a large sum to your super could affect your eligibility for the age pension and other Centrelink benefits. Timing constraints: The contribution must be made within 90 days of receiving your home’s sale proceeds, which may be a tight deadline for some. It’s wise to talk to your financial adviser early. A one-time concession: You can only make a downsizer contribution once. This means the timing and the amount will require careful planning.

Reduce financial pressure with downsizer contributions.

Australian retirees and those saving for retirement have been up against high inflation, cost of living pressures and now investment market volatility. We’re seeing an uptick in clients seeking to increase their super to build a more substantial buffer against economic uncertainty.

One popular option is a downsizer contribution to superannuation. Here, eligible Australians sell their home and contribute up to $300,000 for a single person or $600,000 for a couple from the sale into their super.

The name ‘downsizer contribution’ taps into the propensity for some aged over 55 to trade in the family home for something more suitable. Or relocate to ‘sea change’ or ‘tree change’ locations.

Who’s eligible to make a downsizer contribution?

To be eligible to make a downsizer contribution to your super, you must be aged 55 or older and have owned your home for at least 10 years prior to the sale.

Your home must be in Australia and can’t be a caravan, houseboat or mobile home. Additionally, the proceeds from the sale must be exempt or partially exempt from capital gains tax under the main residence exemption.

The pros

The federal government has designed the downsizer contribution scheme to make it as attractive as possible for those who are eligible. Here are 5 benefits to consider:

Tax-free top up: Downsizer contributions provide a taxfree way to boost your superannuation savings.
Exempt from contribution caps: These contributions are not subject to the usual annual contribution caps, which means you can make a significant one-time boost to your super.
No work tests or age limits: Downsizer contributions don’t require you to meet work tests and there’s no upper age limit.
Couples get double the benefit: Both spouses can contribute up to $300,000, potentially adding a total of $600,000 to their superannuation balances – even if your home was only owned by one spouse.
No impact to other contributions: Downsizer contributions can be made in addition to other concessional and non-concessional contributions.

The cons

If a downsizer contribution is a possibility for you, here are 5 limitations to consider:

No personal tax deduction: Downsizer contributions can’t be claimed as a personal tax deduction so if you’re a high income earner, talk to your financial adviser.
Included in your transfer balance cap: Downsizer contributions count towards your transfer balance cap – which is $2 million per person for the 2026 financial year. The transfer balance cap limits the amount you can move into the tax-free retirement phase, so if you think a downsizer contribution could bring you close to the cap, it’s important you talk to your financial adviser first.
Centrelink implications: Adding a large sum to your super could affect your eligibility for the age pension and other Centrelink benefits.
Timing constraints: The contribution must be made within 90 days of receiving your home’s sale proceeds, which may be a tight deadline for some. It’s wise to talk to your financial adviser early.
A one-time concession: You can only make a downsizer contribution once. This means the timing and the amount will require careful planning.

Making a downsizer contribution is a tax-effective way to convert lazy capital into retirement income. If your super needs a boost and your housing needs have changed, now could be the right time to consider making a downsizer contribution to your super.

Talk to us.

If you’re thinking of selling your home and contributing some of the proceeds to your super, it’s important to talk to your Financial Adviser.

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