Superannuation – expanding eligibility for downsizer contributions
The Government will reduce the minimum eligibility age to make downsizer contributions into superannuation from 60 to 55 years with effect from the start of the first quarter after Royal Assent of the enabling legislation. There are no changes to the remaining current downsizer eligibility criteria. The downsizer contribution allows people to make a one-off post-tax contribution to their superannuation of up to $300,000 per person from the proceeds of the sale (or part sale) of a dwelling that is wholly or partly eligible for the main residence exemption. While downsizer contributions do not count towards an individual’s non-concessional contribution cap, they count towards the transfer balance cap. The objective of this measure is to provide greater flexibility to contribute to superannuation, support eligible taxpayers to downsize sooner to a home that better suits their needs and increase the availability of suitable housing for families.
Incentivising pensioners to downsize
The Government will reduce the financial impact on pensioners looking to downsize by: • extending the assets test exemption for principal home sale proceeds from 12 months to 24 months for income support recipients; and • changing the income test to apply only the lower deeming rate (0.25%) to principal home sale proceeds when calculating deemed income for 24 months after the sale of the principal home. It is anticipated that this measure will minimise the financial burden on older Australians and free up housing stock for families.
[The Tax Institute’s Budget Update 2022/23]
[Tax Month – October 2022 – Previous Month, 5.11.22]