downsizer contributions

On this page

• What are downsizer contributions?
• How do downsizer contributions work?
• Things to consider
• How to make a downsizer contribution

how do downsizer contributions work?

Simply put, the downsizer contribution scheme lets you use money from the sale of your home to help boost your super balance. 

You need to make your downsizer contribution within 90 days of the sale of your home. This type of contribution doesn’t count towards any of the contribution caps. And it won’t affect your total superannuation balance until it’s recalculated at the end of the financial year.

You need to meet certain eligibility criteria to make a downsizer contribution. There are also some things to consider before deciding if it’s right for you.

Eligibility

• You are 55 years or older (there is no maximum age limit).
• The home you sell is in Australia, and you or your spouse need to have owned it for at least 10 years.
• The home you sell is not a caravan, houseboat or other type of mobile home.
• The home you sell is fully or partially exempt from capital gains tax.
• You haven’t already made a downsizer contribution to your super from the sale of another home, or from the part sale of your home.

You can find the full list of eligibility criteria on the ATO website. 

things to consider

Downsizer contributions can be a useful way to boost your super balance.

For some, there can be some real upsides to downsizing:

• making a downsizer contribution can give your super a much-needed boost if you don’t have enough for retirement
• there’s no work test or upper age limit to make a downsizer contribution
• you don’t need to buy another home
• the money you contribute is tax-free when you start to get an income through an income stream.

But there are also some important things to consider before you decide if it's right for you.

Age Pension eligibility

Selling your home could reduce the amount of Age Pension you’re entitled to — maybe to zero. That’s because your family home isn’t counted under the means-test for the pension — but everything else you own is.

So, if you sell up and make a downsizer contribution, it will be counted towards the Centrelink income and assets test.

Transfer balance cap

Downsizer contributions count towards your transfer balance cap, which is currently $1.9 million. This cap applies when you move your super savings into retirement phase. It’s also one of the things used to figure out your Age Pension eligibility.

Anything above the transfer balance cap must go in a super account. Investment earnings in your super account are taxed at 15%.

If you're transitioning to retirement, you can have more than $1.9 million in your income stream account. But you will have to move some out when you reach retirement and start to access it. 

Tax and Centrelink

There are some other tax and Centrelink issues you also need to consider before you decide what to do.

It’s a good idea to speak to a financial adviser to understand the impact of selling your home and making a downsizer contribution. Get advice with HESTA.

For more information on downsizer contributions, you can visit the ATO website.

how to make a downsizer contribution

Step 1: Complete the form

Complete the ATO Downsizer contribution into super form before you make a contribution.

This tells us you intend to make a downsizer contribution, so we can get ready to accept it.

Step 2: Send the form to us and wait for confirmation

Send the form to us via:

• Email: hesta@hesta.com.au
  OR
• Post: HESTA, Locked Bag 5136 Parramatta NSW 2124

Note: A member of our team will get in touch by phone or email to confirm that we’ve accepted your form. You’ll need to wait to hear from us before you transfer any money.

Step 3: Pay your contribution

The easiest way to make your contribution is with BPAY® or electronic funds transfer (EFT). You can find your BPAY or EFT details in your HESTA online account.

Log in to your account to get your BPAY or EFT details