The downsizer contribution allows eligible Australians to contribute up to $300,000 from the sale of their home into superannuation. It is one of the most effective ways to boost super later in life without being constrained by the usual contribution caps.
Key Facts at a Glance (FY2024–25)
| Feature | Detail |
|---|---|
| Minimum age | 55 (lowered from 65 in January 2023) |
| Maximum contribution | $300,000 per person ($600,000 for couples) |
| Work test | None — does not apply |
| Concessional/NCC cap | Does NOT count toward either cap |
| TSB limit | No TSB limit applies |
| Transfer Balance Cap | Does count toward TBC for pension phase purposes |
| Property ownership requirement | You or your spouse must have owned the home for at least 10 years |
| Timeframe to contribute | Within 90 days of settlement (or longer period approved by the ATO) |
| Number of uses | Once in a lifetime |
Who Is Eligible?
To make a downsizer contribution, you must:
- Be aged 55 or older at the time of the contribution
- Sell or dispose of a home in Australia that you (or your spouse) have owned for at least 10 years
- The home must have been your principal place of residence at some point during the ownership period (full CGT main residence exemption or partial exemption applies)
- You have not previously used the downsizer contribution (one-time only)
- The contribution must be made within 90 days of settlement
What qualifies as a home: A house, unit, apartment, granny flat, townhouse, or caravan — provided it is on land. Houseboats or caravans without land do not qualify. Investment properties held separately from your main residence also do not qualify.
How Much Can You Contribute?
The maximum is $300,000 per person or the total proceeds of the home sale — whichever is less.
Example:
- A couple sells their home for $750,000
- Each can contribute up to $300,000 (total $600,000), as the proceeds ($750,000) exceed $600,000
- If the home sold for $400,000, the maximum combined contribution would be $400,000 ($200,000 each, split however they choose — it does not need to be equal)
Tax Treatment
Downsizer contributions:
- Enter the fund as non-concessional contributions (after-tax money) — no additional tax on entry
- Are not included in the NCC cap ($120,000) or concessional cap ($30,000)
- Do not require a work test
- Do apply to the transfer balance cap (TBC) ($1.9M in FY2024–25) when moved into pension phase
Because these contributions are non-concessional (no deduction available), there is no tax advantage on contribution — the advantage is getting a potentially large amount into super’s low-tax (0–15%) earnings environment at a stage of life where other contribution options are more restricted.
How to Make a Downsizer Contribution
- Sell your home and confirm you meet eligibility criteria
- Complete ATO Form NAT 75073 (“Downsizer contribution into superannuation form”)
- Submit the form to your super fund before or at the time of making the contribution
- Make the contribution within 90 days of settlement (the date the buyer takes legal ownership)
- Keep records — the fund will report the contribution to the ATO
Strategic Considerations
- Move money into a low-tax environment: Super’s earnings are taxed at 15% in accumulation and 0% in pension phase — significantly lower than the top marginal rate of 47%
- No age limit: As long as you are 55+, there is no upper age limit — you can contribute at 80 if eligible
- Works even if TSB is above $1.9M: You can still contribute even if your total super balance is very large — but be aware of the TBC for pension phase purposes
- Coordinate with aged care planning: Selling the family home affects the asset test for the Age Pension and potentially aged care means testing — seek advice
Frequently Asked Questions
Can both members of a couple contribute if only one owns the home? Yes — if you are spouses and either of you owned the property for 10+ years, both of you can make a downsizer contribution (up to $300,000 each) from the same sale proceeds.
Can I use the downsizer contribution if I have already reached the TBC? You can make the contribution into the accumulation phase — earnings will still be taxed at 15% rather than your marginal rate. You cannot move excess above the TBC into pension phase, but accumulation phase is still tax-advantaged.
Does the property need to be in my name only? No — if you and your spouse jointly owned the property, both of you qualify as long as the 10-year ownership requirement is met.
For more: Non-Concessional Contributions, Super Contribution Limits, Superannuation Rates Australia, Age Pension Eligibility. For advice tailored to your situation, speak with a licensed financial adviser via MoneySmart.