The keys are handed over, the last boxes are taped shut, and the settlement cheque clears – then comes the question of what to do with the proceeds. For Australians aged 55 and over selling a home, part of the answer can go straight into superannuation, well beyond the limits that normally apply to contributions.
The downsizer contribution rules let eligible home sellers add up to $300,000 each – or $600,000 for a couple – into their superannuation accounts from the sale, sitting outside the usual annual contribution caps. Here is what determines who qualifies, how the 90-day clock works, and what it can mean for an Age Pension assessment.
How much can actually go in?
Under Australian Taxation Office (ATO) rules, an individual aged 55 or older can contribute up to $300,000 from the sale of an eligible home into superannuation. A couple can contribute up to $600,000 combined, split between them in any proportion up to $300,000 each, provided the total does not exceed what the home actually sold for.
MoneySmart’s own worked example sets out the split: “A couple, Bruce and Jo, sell their home for $850,000. Together, they can contribute up to $600,000 to their super, in total.” That could mean $300,000 each, or an uneven split such as $300,000 for Jo and $100,000 for Bruce.
Because downsizer contributions do not count toward the concessional or non-concessional contribution caps, they can be made regardless of how much already sits in a superannuation balance, or how many other contributions have been made in recent years. That sits apart from the standard non-concessional contributions cap, set at $130,000 a year for the 2026-27 financial year.
Who actually qualifies?
Eligibility turns on a handful of conditions rather than a single test. The person making the contribution must be 55 or older at the time it is made, and the property must be in Australia – a caravan, houseboat or other mobile home does not qualify.
The seller, or their spouse, generally needs to have owned the home for at least 10 years, and the sale must qualify, in full or in part, for the main residence capital gains tax exemption. A downsizer contribution can be made only once in a lifetime, tied to one sale, so there is no second attempt if the paperwork or timing goes wrong.
One detail catches people out: the rules do not require buying a smaller or cheaper home afterwards, or buying any replacement home at all. MoneySmart notes the requirement is simply that the eligible home is sold and the other conditions are met.
What’s the deadline once the money lands?
The contribution generally must be made within 90 days of receiving the sale proceeds, unless the ATO agrees to allow extra time. The choice to treat a contribution as a downsizer contribution is made using the ATO’s downsizer contribution form, which needs to reach the super fund at or before the contribution is made.
The money is not taxed on the way into the fund, and once it lands it becomes part of preserved superannuation like any other contribution, subject to the normal rules on when it can be drawn down. It is reflected in a person’s total superannuation balance from its next calculation date, on 30 June.
Does this affect the Age Pension?
A downsizer contribution adds to a person’s assessable assets for Age Pension purposes once it moves into superannuation, and the size of any effect on a payment depends on individual asset and income test settings. Age Pension rates, thresholds and deeming rates are indexed each 20 September, so the figures that apply to a particular set of circumstances are best confirmed directly with Services Australia.
Anyone weighing a downsizer contribution against other uses for sale proceeds can check current thresholds and worked examples through MoneySmart, confirm contribution rules through the Australian Taxation Office, or ask Services Australia how a particular contribution would sit against the assets and income tests, or seek licensed financial advice.
What the rule offers, in the end, is a separation that used to be far messier: sell the home, then decide – within that 90-day window – how much of the proceeds moves into superannuation, without having to buy anything smaller in return.
