If tax amendments that were introduced to Parliament recently are passed, the eligibility for the one-off bump to retirement savings will have widened.
The new bill would allow individuals over the age of 55 to make downsizer super contributions provided they meet the eligibility criteria. It could apply as soon as October.
A reduction has already recently taken place, bringing the age currently down to 60. Should this amendment be passed, it would have reduced the age by a decade in a matter of months.
This will allow a one-off post-tax contribution of up to $300,000 after a main residence has been sold(subject to other requirements).
This will have the potential to free up suitable housing for growing Australian families, by encouraging empty nesters or older Australians to sell up and downsize to something more suitable.
There are other benefits as well. An additional ten years does give people more time to learn what suits them and what doesn’t. It also allows for more money to get into the system if you have reached your contribution cap and have maxed out on the total super balance.
There are a couple of things to consider. In order to be eligible, the home being sold must have been owned for at least a decade, be at least partially exempt from CGT under the main residence exception and the super contribution needs to be deposited within 90 days post sale.
The scheme can only be used once, however couples can double the $300,000 limit.
If you would like to understand more about downsizer super payments to determine whether you are eligible, you are more than welcome to discuss your situation with us.
Such an amendment will change the dynamics of the scheme as participants will have their money locked away for 10 years.
So individuals need to consider their plans and decide whether they will need that money within that time frame; whether they act strategically and make a non-concessional contribution from excess sale proceeds and save this scheme for a later date.
It really does depend on your personal situation and what is going to be the best financial outcome for you in the end.
Contact our friendly team of trusted advisors on 03 98859793 or at enquiries@glanceconsultants.
