
Downsizer super contributions: Everything you need to know
Downsizing in retirement is a common move for Australians who want to simplify their lifestyle, reduce expenses or relocate closer to family. On the other hand, downsizing can also free up a large chunk of equity from your home and give you the chance to strengthen your retirement savings.
To support this, the government introduced the downsizer contribution scheme. It's a one-time opportunity for eligible Australians to move a portion of their home sale proceeds into their super without triggering standard contribution caps. It's a simple concept, but there are important rules and timelines to understand if you want to take full advantage.
Here's what you need to know — including eligibility, how much you can contribute and the steps to get it right. For more help, see how Wilson Porter can support your super planning.
How downsizer contributions work
A downsizer contribution allows you to make a one-off, after-tax super contribution of up to $300,000 using the sale proceeds from your home. If you're part of a couple, you can both contribute, bringing the total to $600,000.
This contribution is tax-free when it goes into your super fund, and it doesn't count toward your concessional or non-concessional contribution caps. That makes it one of the most effective ways to boost your super if you're nearing retirement and looking to top up your super savings fast.
There's no requirement to buy a new home after selling, and you don't need to meet a work test. It's available to retirees and those no longer in the workforce. However, it's a one-time contribution — once used, you can't make another downsizer contribution from a future home sale.
Who is eligible, and what are the contribution limits?
To make a downsizer super contribution, you must meet the following eligibility rules:
- You're 55 or older at the time of contribution (this was lowered from 60 on 1 January 2023).
- The property is in Australia and has been owned by you or your spouse for at least 10 years.
- The property must be your current or former main residence.
- It must be fully or partially exempt from capital gains tax (CGT) under the main residence exemption.
- The property can't be a caravan, houseboat or mobile home.
- You or your spouse haven't previously made a downsizer superannuation contribution.
Importantly, even if your spouse wasn't on the property title, they may still contribute if all other criteria are met.
Contribution limits:
- Up to $300,000 per individual or $600,000 for a couple.
- The total contribution amount can't exceed the property's sale price.
- Contributions must be made within 90 days of receiving the sale proceeds (generally the settlement date). If you're delayed by circumstances outside your control, you may be able to request an extension from the Australian Taxation Office.
Making a downsizer contribution
Once you've sold your home and meet the eligibility criteria, here's how to make your downsizer superannuation contribution:
- Complete the ATO Downsizer Contribution Into Super Form before making the contribution.
- Submit the form to your super fund either before or at the same time as the contribution.
- Transfer the funds using:
- BPAY®
- EFT via your super fund's online portal
- Cheque (submitted with the form)
Make sure the contribution is clearly identified as a downsizer contribution — this ensures your super fund classifies it correctly. Also, not all super funds accept downsizer contributions, so check with yours before initiating the transfer.

Impact on Super Caps and Age Pension
The downsizer contribution scheme is a powerful way to boost your super, but it's important to understand how it affects your superannuation limits and potential Age Pension eligibility. These contributions follow unique rules that can influence both your tax position and access to government support.
Superannuation impacts
Downsizer contributions don't count toward your annual concessional or non-concessional contribution caps, which allows you to make other voluntary contributions in the same year without breaching limits. However, they do count toward your transfer balance cap, which is currently $1.9 million. This cap limits how much you can move into a tax-free retirement income stream. Any amount exceeding the cap stays in your accumulation account, where earnings are taxed at 15%.
Even if you're not drawing a pension yet, downsizer contributions still affect your total super balance, which can impact your eligibility for future contribution types or tax benefits.
Age Pension impacts
Your primary home is exempt from the Centrelink assets test, but once sold, the sale proceeds moved into super are assessable. Downsizer contributions are included in both the assets and income tests, which may reduce or eliminate your Age Pension entitlements.
If you're approaching pension age and relying on government support, it's worth considering whether the benefit of increasing your super savings outweighs the possible reduction in payments. Seeking professional advice can help you make the right call for your situation.
Alternative contribution strategies
While many people make a downsizer contribution after selling their full interest in the family home, there are alternative strategies that may apply in more complex situations — especially if you're only partially selling or if you're using a self-managed super fund (SMSF).
Partial equity sale
If you sell only part of your home's equity — say, 20% — you can only contribute the equivalent value of that share as a downsizer contribution. For example, if your home is worth $800,000 and you sell 20% for $160,000, the maximum contribution available under the downsizer measure would be $160,000 between you and your spouse.
It's also important to know that the downsizer measure applies to one disposal event only. So, if you later sell the remaining equity in the property, you won't be eligible to make another downsizer contribution. This makes timing and planning especially important.
In-specie contributions
If you're a member of an SMSF, you may have the option to contribute assets such as listed shares or managed funds instead of cash, known as "in-specie contributions". However, using in-specie transfers for downsizer contributions is more complicated. You must ensure that the value of the transferred asset reflects the amount you're entitled to contribute under the downsizer contribution rules.
Additionally, not all assets are eligible, and your SMSF must be structured to accept in-specie contributions under its trust deed. You'll also need to carefully document the value of the asset at the time of transfer and ensure the transaction is compliant with superannuation and tax laws.
Because these strategies involve more moving parts, we strongly recommend seeking personalised financial advice if you're considering a partial sale or an in-specie contribution. The downsizer contribution scheme offers great benefits, but only if applied correctly.
FAQs
How do I know if I meet the 10-year ownership rule?
The property must have been owned by you or your spouse for 10 years or more, measured from settlement to settlement.
Can I contribute if my property is only partially exempt from CGT?
Yes, full CGT exemption is not required — partial exemption is sufficient.
What happens if I miss the 90-day contribution deadline?
You can apply for an extension with the ATO, but it's only granted in specific circumstances.
Can my spouse contribute if they're not on the title?
Yes, provided all other eligibility criteria are met.
Does this affect my Age Pension?
Yes. The downsizer contribution increases your assessable assets and may reduce your Age Pension.
Are there penalties for making an invalid contribution?
Yes. If your contribution doesn't meet the criteria, it may be rejected or count toward other contribution caps.
Can I make multiple downsizer contributions?
No, the downsizer measure is a once-only opportunity tied to a single sale.
What if I sell only part of my home's equity?
You can only contribute the amount you receive from the equity sold.
Final thoughts
Downsizer contributions are a powerful way to give your retirement savings a last-minute boost, especially if you're no longer working and can't rely on concessional contributions. But there are strict rules, contribution limits and timing requirements to get it right. It's also essential to consider how the contribution could affect your Age Pension or your broader financial situation.
If you're thinking of selling your home and want to explore whether the downsizer super contribution is right for you, we can help. Contact us to speak with a financial adviser and ensure your strategy aligns with your goals.