If you’ve been on the fence about whether to finally sell your long-held family home and capitalise on today’s record-high property prices, a new law designed to encourage downsizing may be great news for you.
New changes from the Federal Government mean the age that you can now deposit the proceeds of a property sale into your superannuation has been reduced from 65 to 60.
Each owner of the sold property can deposit $300,000 of the proceeds directly into their superannuation. This means that as a couple holding a property in joint names, you can add up to $600,000 to your super fund, receiving significant tax advantages.
The age-limit reduction is designed to free up more family homes to be sold. It has been made in the recent federal Treasury Laws Amendment (Enhancing Superannuation Outcomes For Australians and Helping Australian Businesses Invest) Bill 2021.
Almost 40,000 Australians have contributed $8.9 billion to their super funds under this measure. You may want to talk to your accountant or financial adviser to delve into the nitty-gritty and ensure it is the right strategy for you.
Here are the key elements of the downsizer initiative:
- You must have owned the home for more than 10 years.
- Couples can each place $300,000 into their respective super funds so long as each individual is aged 60 or more.
- It doesn’t matter how much you have in your super fund already.
- There are no test requirements, which means you can still be working. You also have no obligation to buy a new, smaller home as part of the initiative.
- Your money is deposited and returned tax-free when withdrawn from your super.
- You can use the proceeds of a previous family home (a one-time principal residence) that’s now rented. So, you may not have to move at all.
If this change encourages you to think about selling and downsizing, please do not hesitate to contact us. We can discuss current price trends in our area, buyer preferences and the marketing strategies that will maximise the value of your family home.