These significant changes took effect from 1st July 2018.
Individuals aged 65 years or over are now able to contribute up to $300,000 (per person) to superannuation from the proceeds of selling their main residence. These ‘downsizer contributions’ can be made regardless of other restrictions and caps that apply to voluntary super contributions (eg age, meeting the work test or the total super balance test).
Downsizer contributions must:
* Apply to contracts for sale entered into on or after 1 July 2018, relate to the sale of a dwelling that was their main residence (wholly or partly) and was owned for at least 10 years before disposal, and be made within 90 days of the change of ownership (settlement date), with any extensions to be approved by the Commissioner of Taxation.
* Contracts entered into prior to 1 July 2018 are not eligible even if the settlement occurs after this date
The strategy will mainly benefit people who can now contribute more money to superannuation than would otherwise be possible and consequently reduce the tax payable on future investment earnings.
First Home Super Saver Scheme
Effective:1 July 2017 for super contributions
1 July 2018 for release authorities
Eligible individuals who made voluntary super contributions since 1 July 2017 can now withdraw these contributions to purchase their first home.
Voluntary contributions are limited to $15,000 per year, up to a total of $30,000 and count towards the relevant contribution cap.
Withdrawals are limited to 100% of NCCs and 85% of concessional contributions (CCs) plus associated earnings.
The strategy may help some people by using the concessionally taxed super environment to save for a home purchase.