House getting a bit too big? Downsize your house and boost your super

As you approach retirement, is the family home feeling a bit too big now that the kids have moved out? Maybe the garden is getting a little hard to handle, or your home requires more maintenance than you’re able to manage.

If you’ve owned your home for at least 10 years and are aged over 55, you may be eligible to contribute up to $300,000 to your super from the proceeds of selling your home.

Some additional options for couples

If you own the home with your spouse, you can each contribute up to $300,000 to your super funds for a total of $600,000 – so long as the combined amount doesn’t exceed the total proceeds from the house sale.

You can choose to contribute half each, or split the contribution (for example, if your home was sold for $500,000, one spouse could contribute $300,000 and the other $200,000).

Contributions must be made to your super fund within 90 days of receiving the proceeds of sale. However, in some circumstances you may be able to request an extension of time.

Downsizer contributions don’t count towards to your contribution caps

Downsizer contributions are considered an after-tax contribution, so they are not taxed. Also, they don’t count towards your after-tax contribution cap – this ordinarily limits the amount of after-tax contributions you can make to your super account in a single year (the cap is $120,000 for the 2024-25 financial year).

However, downsizer contributions count towards your transfer balance cap – this is a lifetime limit on the amount you can transfer into one or more retirement products (for the 2024-25 financial year, this is $1.9 million).

You can only access the downsizer scheme once. To find out more about eligibility requirements and how to apply, refer to the ATO website.

How selling your home can help you boost your super