What Makes It Special
The downsizer contribution bypasses almost all normal super restrictions:
| Normal Rules | Downsizer Rules |
|---|---|
| Work test required after 67 | No work test |
| $120K non-concessional cap | $300K per person |
| $2.0M balance limit | No balance limit |
| Age 75 cut-off | No age limit |
Example: The Smiths Downsize
John (72) and Mary (70) sell their Sydney home for $1.5 million. They've lived there for 25 years. They buy a smaller apartment for $800,000, leaving $700,000.
Each can contribute $300,000 to super as a downsizer contribution. Total: $600,000 added to their retirement savings, despite being over 70 with no work test.
How the Advanced Calculator helps: Model your downsizer contribution and see the impact on Age Pension and retirement projections in one place. Open the Advanced Calculator
⚠️ Age Pension Warning: Downsizer contributions count toward the Age Pension assets test. See our detailed article: The Downsizer Contribution Trap, when it hurts more than it helps.
Strategic Considerations
- Transfer Balance Cap: Downsizer contributions don't count toward your TBC until you start a pension
- Tax-free vs taxable: The contribution is non-concessional, so withdrawals after 60 are tax-free
- Estate planning: Super death benefits have different tax treatment than personal assets
Key tip: You don't have to actually "downsize." You can sell and rent, or even sell and buy something more expensive. The name is misleading � it's really a "home sale contribution."
Disclaimer: This article is for informational purposes only. Consult a licensed financial adviser for advice specific to your circumstances.
Run your own numbers
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