From age 55, eligible Australians can contribute up to $300,000 each ($600,000 per couple) into superannuation from the proceeds of selling their home — with no work test required, and without it counting towards either the concessional or non-concessional contribution caps.
Downsizer contributions still count as an assessable asset for Centrelink Age Pension purposes once inside super. Moving money out of your home — which is normally exempt from the assets test — and into super, which isn't, can actually reduce your Age Pension entitlement.
What a Downsizer Contribution Is
A downsizer contribution lets eligible Australians aged 55 and over contribute proceeds from selling their home directly into superannuation — up to $300,000 per person, or $600,000 combined for a couple, regardless of whose name was on the title, as long as it was jointly the couple's main residence. It's designed to encourage older Australians to downsize from a family home into something smaller, freeing up housing stock while boosting retirement savings.
Key Eligibility Rules
- Age 55 or older at the time the contribution is made — there is no maximum age limit
- The home must have been owned by you or your spouse for at least 10 years before the sale
- The property must qualify (in whole or in part) for the main residence CGT exemption
- The contribution must be made within 90 days of receiving the sale proceeds (settlement)
- It can only be used once per person — not once per property — so you can't use it again on a future home sale
Eligibility Checklist Table
| Requirement | Rule |
|---|---|
| Minimum age | 55, no maximum |
| Ownership period | At least 10 years by you or your spouse |
| Property type | Must qualify for main residence CGT exemption (in whole or part) |
| Contribution deadline | Within 90 days of settlement |
| Maximum per person | $300,000 |
| Maximum per couple | $600,000 |
| Number of uses | Once per person, ever |
| Work test | Not required |
What Makes It Attractive
Downsizer contributions have several advantages that set them apart from ordinary super contributions:
- Doesn't count towards contribution caps — not the $32,500 concessional cap, and not the $130,000 non-concessional cap (or $390,000 bring-forward)
- Available even with a large total super balance — unlike ordinary non-concessional contributions, which are blocked entirely once your total super balance reaches the $2.1 million general transfer balance threshold, downsizer contributions can still be made regardless of balance
- No work test — some other contribution types for older Australians require you to satisfy a work test; downsizer contributions don't, making them accessible to fully retired people
How It Interacts With the Age Pension
This is the most important trade-off to understand before using the scheme. Under the Centrelink assets test, the home you live in is generally an exempt asset — it doesn't count towards how much you can hold before your Age Pension starts reducing. Superannuation, on the other hand, does count as an assessable asset (once you're of Age Pension age).
So when you sell your home and put the proceeds into super via a downsizer contribution, you're effectively converting an exempt asset into an assessable one. Depending on your total assets, this can reduce or even eliminate Age Pension entitlements that you previously had. Anyone close to the Age Pension asset test thresholds should model this carefully — potentially with a financial adviser — before committing to a downsizer contribution.
Practical Strategy
Downsizer contributions are most often used by retirees or near-retirees moving from the family home into a smaller property, freeing up equity to top up retirement savings. A common and effective use is topping up a spouse's lower super balance — since the contribution isn't linked to whose name was on the title, a couple can direct funds to whichever spouse's account benefits most, as long as the home was jointly their main residence.
This can be a useful equalisation tool between spouses with uneven super balances, which can also help optimise Transfer Balance Cap usage in pension phase down the track — see our SMSF pension phase guide for how that cap works.
Can a Downsizer Contribution Go Into an SMSF?
Yes. Downsizer contributions can be paid into an SMSF just like any other regulated super fund — there's nothing SMSF-specific that blocks it. Once inside the SMSF, the contribution becomes part of the member's balance and can immediately support pension phase for eligible members who've already met a condition of release, subject to the fund's own liquidity and cash flow considerations at the time.
Frequently Asked Questions
How much can I contribute under the downsizer contribution scheme?
Up to $300,000 per person, or $600,000 combined for a couple, from the proceeds of selling an eligible home.
What is the minimum age for a downsizer contribution?
55, with no maximum age limit.
Do downsizer contributions count towards my contribution caps?
No — they don't count towards the concessional or non-concessional caps, and can be made even above the $2.1 million total super balance threshold.
Do downsizer contributions affect the Age Pension?
Yes — moving proceeds from an exempt home into an assessable super balance can reduce Age Pension entitlements.
Related Articles
- Excess Super Contributions Tax: What Happens If You Go Over the Cap
- Can I Use My Super to Buy a House?
- SMSF Pension Phase: Account-Based Pensions Explained
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