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  • Wealth Matters

New Downsizer Contribution Eligibility Age: 55 and Over!

Effective January 1, 2023, the eligibility age for making downsizer contributions has been lowered to age 55. This change was made through the Treasury Laws Amendment (2022 Measures No. 2) Bill 2022, which received Royal Assent on December 12, 2022. Previously, the eligibility age was 65, but it was lowered to 60 on July 1, 2022. Under this new policy, individuals who are 55 years or older and meet the other eligibility criteria will be able to make a downsizer contribution of up to $300,000 per person ($600,000 per couple) into their super fund using the proceeds from the sale of their home. There have been no changes to the other eligibility requirements. There are both potential benefits and risks to consider when weighing up the decision to use a downsizer contribution strategy as part of your retirement planning.


  1. Increased retirement income: By making a downsizer contribution, you may be able to increase your retirement income by investing the proceeds from the sale of your home into your superannuation fund.

  2. Tax advantages: Depending on your personal circumstances, making a downsizer contribution may provide tax advantages, such as a tax-free environment for your contributions and potentially lower tax on your investment earnings.

  3. Simplified asset ownership: Downsizer contributions can be a way to simplify your asset ownership and streamline your financial affairs in preparation for retirement.

  4. Potential to use home equity: Downsizer contributions can provide a way to access the equity in your home and use it to boost your retirement savings.

Risks and disadvantages:

  1. Reduced liquidity: By using the proceeds from the sale of your home to make a downsizer contribution, you may be reducing your liquidity and access to cash. This can be a concern if you need to access funds for unexpected expenses or emergencies.

  2. Market fluctuations: The value of your superannuation fund may fluctuate based on market conditions. This means that the value of your downsizer contribution may increase or decrease over time, which can affect your retirement income.

  3. Eligibility restrictions: To be eligible for a downsizer contribution, you must meet certain criteria, such as being aged 55 or over and selling a home that you have owned for at least 10 years. If you do not meet these criteria, you will not be able to make a downsizer contribution.

  4. Potential tax implications: Depending on your personal circumstances, making a downsizer contribution may have tax implications. It's important to consider how this may affect your overall financial situation before making a downsizer contribution.

  5. Limited contribution amounts: The maximum amount that you can contribute through a downsizer contribution is currently $300,000 per person ($600,000 per couple). If you have a larger amount that you want to contribute to your superannuation, you may need to consider other options.

Overall, it's important to carefully consider the potential benefits and risks of a downsizer contribution strategy and how it fits into your overall retirement plan.

If you have any further questions or would like to discuss your specific financial situation, please don't hesitate to contact us. We would be happy to offer our expert advice and help you develop a downsizer contribution strategy that works best for you. We look forward to hearing from you and helping you achieve your financial goals.

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