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If you’re thinking about moving to a smaller home, you may have heard about the Australian Government’s Downsizer Contribution Scheme. It’s a way to boost your superannuation savings using some of the proceeds from selling your family home.
For many over-55s, this scheme offers a welcome opportunity to free up equity, simplify life, and strengthen financial security for the years ahead. But how does it actually work, and who can benefit? Let’s break it down.
What is the Downsizer Contribution Scheme?
The Downsizer Contribution Scheme allows eligible Australians to contribute up to $300,000 (per person) from the sale of their home into their superannuation fund. Couples can contribute up to $600,000 combined.
This can be a powerful way to grow your retirement income, even if you’ve already reached the usual contribution caps or are beyond the age limits for standard super contributions.
Who is eligible?
You may be eligible if:
- You are aged 55 or older at the time of making the contribution.
- You or your spouse have owned your home for at least 10 years prior to the sale.
- The home is in Australia and is exempt (or partially exempt) from capital gains tax under the main residence exemption.
- You make the contribution within 90 days of receiving the sale proceeds (usually at settlement).
- You complete the ATO Downsizer Contribution Form before or at the time of making the contribution.
There is no maximum age limit, and you don’t need to be currently working to be eligible.
Example
Imagine you’re 62 and you’ve owned your family home for 12 years. You sell it and use $300,000 of the proceeds to make a downsizer contribution into your super. Because you meet the criteria, that contribution doesn’t count toward your usual non-concessional contribution caps. Later, when you access your super (after turning 60), you may also benefit from favourable tax treatment.
What are the benefits?
For many retirees and semi-retirees, the benefits are both financial and lifestyle-driven:
- Boost superannuation savings – enjoy a more comfortable and secure retirement.
- No contribution caps – downsizer contributions don’t count toward the usual non-concessional contribution limits.
- Free up equity – selling the family home can release funds for travel, hobbies, or greater peace of mind.
- Simplify your lifestyle – moving into a lower-maintenance home or a land lease community can reduce upkeep and stress.
Things to keep in mind
While the scheme offers valuable opportunities, there are some important considerations:
- Downsizer contributions are not tax-deductible.
- You can only make a downsizer contribution once in your lifetime.
- Funds transferred to super may affect your Age Pension eligibility, as they are counted under income and asset tests.
- Contributions must be made within 90 days of receiving the sale proceeds, unless you receive an extension from the ATO.
- Always seek advice from a qualified financial adviser to ensure this strategy suits your personal circumstances.
How this links to downsizing into a Hampshire Village
For many over-55s, selling the family home is about more than just finances – it’s about finding a lifestyle that feels easier, more secure, and more connected.
At Hampshire Villages, many residents choose to downsize into a welcoming land lease community where they:
- Own their home without paying stamp duty or council rates.
- Keep their capital gains when they sell.
- Enjoy a lock-and-leave lifestyle, knowing maintenance is taken care of.
- Feel part of a friendly, like-minded community with great facilities that support health, wellbeing, and social connection.
By combining the Downsizer Contribution Scheme with the benefits of land lease living, you can unlock both financial flexibility and lifestyle rewards.
Downsizing is a big decision, but it can open the door to a more comfortable and enjoyable retirement. The Downsizer Contribution Scheme helps you make the most of the equity you’ve built, while a move to a Hampshire Village lets you embrace the next chapter with confidence and peace of mind.