Age limit lowered for empty nester super scheme

January 21, 2023 BY

Federal Treasurer, Jim Chalmers has pushed through a forecasted change to a downsizer super contribution scheme. Photo: LUKAS COCH/AAP

DOWNSIZERS now have the option of topping up their superannuation with proceeds of their home sale after the Federal Government expanded eligibility for a contribution scheme.

Starting this year, people aged 55 and older can deposit up to $300,000 into their super account after selling a property to top up their retirement savings in the final years of their working life.

Couples can double up on the scheme and may contribute a total of $600,000 from a joint-owned home.

The eligible age has been lowered from 65 and older when the scheme opened in July 2018 to 60 in July last year, before reaching 55 from 1 January 2023.

Former Prime Minister Scott Morrison announced the latest age drop ahead of last year’s Federal election, which his successor Anthony Albanese pledged to match before winning government.

To be eligible for the scheme, vendors must have owned the home for at least 10 years and the sale must be at least partially exempt from the capital gains tax.

Downsizers can also only access the scheme once, while part-sales of homes are also eligible.

Participants need to contact their super fund to organise the contribution, which must be made within 90 days of settlement for the sold home.

A statement from the Federal Government said the scheme would have the added benefit of freeing up more housing stock for young families and other people aiming to purchase a property.

“This is a really important way for Australians to boost their retirement savings if they downsize when the kids move out,” the statement said.

“Expansion of the downsizer scheme allows more Australians to use the equity they’ve built up in their homes to plan for retirement.

“Labor built Australia’s superannuation system, we are proud of it, and we’ll always fight to strengthen it.”