Downsizing & Superannuation

An important option to consider in maximising your retirement income & lifestyle

Realising an opportunity to improve housing availability for families whilst at the same time maximising retirement income for older Australians, the government introduced the Downsizing Contributions Into Superannuation measure from 01 July 2018.

To find out more and eligibility criteria, click here.

In summary, the incentive allows homeowners over 65 the opportunity to maximise their superannuation, by putting up to $300,000 each from the sale of their home into their super fund (or $600,000 per couple). Of course, this encourages those holding large family homes to downsize, further reducing their costs and freeing up larger homes for growing families.

There is a tax advantage too, with a potential $600,000 being allocated as an investment into superannuation, rather than personal income (and therefore taxable). The advantages are obvious, however, that does not mean the incentive is necessarily for everyone.

Most often it will mean moving from a house to a smaller home, apartment or townhouse due to affordability. For those who currently enjoy plenty of space and privacy, the challenge will be in finding a reasonably priced property that meets your needs.

Perhaps one of the largest considerations is the psychological and emotional impact that displacement can have on a person, especially elderly people whose homes contain a lifetime of memories. On the flip side though, some retirees look forward to downsizing and the new freedom and opportunities that flow from lock-it-and-leave-it living (such as little to no maintenance, no big lawns to mow etc).

As always, it’s best to talk to your family and friends first and then see your financial advisor. Together you can explore options as they relate to your own individual circumstances and set out a plan to achieve your desired outcome. 

Then get some professional advice from your local real estate agent about what your home is worth in today’s market and the types and price options of smaller properties in your market. Why not take advantage of our years of experience and knowledge of our local area to help you achieve your goal.  Call us on 07 5525 2866 for an obligation-free chat or click here to email.