Got a spare room or two at home these days? There comes a time for many when a spacious living room becomes less important than the freedom to take overseas adventures (winter and summer!) and enjoy guilt-free coffee and cake (morning and afternoon!). On July 1, a new incentive will kick in for people over 65 who are considering simplifying their home space — and small apartment living is very in vogue these days.
The new downsizer contribution opportunity was one of several measures announced in the 2017-18 Budget as part of the Government’s package of reforms to reduce pressure on housing affordability in Australia. It is a great new opportunity for people aged 65 or over (up to any age!) to get additional assets into the tax-effective superannuation environment without meeting a work test, particularly for those who’ve already stopped working or may have otherwise missed the boat.
Selling the family home and leaving behind neighbours and friends can be difficult and certainly isn’t for everyone. If it makes sense for you, your Westlawn Wealth Management adviser can help you make the most of the downsizer measure so that this major life change will foster a retirement lifestyle to envy.
How does it work?
Those over 65 can make a non-concessional contribution to super of up to $300,000 from the sale of one principal residence, which has been owned for more than 10 years. Couples will be able to contribute $300,000 each. The contribution will not count towards the $1.6 million balance cap or the non-concessional contribution cap, which limits the amount of super that can be transferred into the retirement phase. There is no maximum age or work test rules.
Where to Go Next?
This is an excellent opportunity to boost your available funds in retirement and to use your funds to create a whole new lifestyle. Considering life on the road in your own motorhome? Or moving in with a friend or loved one? Buying a new home is not a requirement. In fact, you may even buy a larger home — perhaps enjoy the company of new roommates by renting out rooms. While this is an incentive geared towards people in the downsizing phase, there is no limitation on how you choose to use the proceeds of the sale of your family home.
Westlawn Tip: Your super contribution must be made within 90 days of receiving the proceeds of the sale, which is usually the date of settlement.
Westlawn Tip: Most super funds will accept downsizer contributions — before making big decisions, contact your Westlawn Financial Adviser to be sure that they do.
Eligibility: Familiarise yourself with the ATO’s basic requirements that you need to meet to qualify for the downsizer measure.
Please call your Westlawn Financial Adviser with questions — about strategising your application and making the most of this opportunity to fund the retirement that you’re dreaming of.
Call us on 1300 WESTLAWN (1300 937 852).