Downsizer contributions are among top questions asked by clients of the BT technical team.
The eligibility age for downsizer contributions had reduced from 60 to 55 years at the start of the year and BT said this was a frequent discussion point for its advisers.
Treasury Laws Amendment (2022 Measures No. 2) Act 2022 had lowered the age from which individuals could make downsizer contributions to their super fund from the proceeds of selling their home.
Starting 1 January, Australians aged 55 and over would be able to contribute up to $300,000 from the proceeds of the sale (or part sale) of their home into their superannuation fund.
A couple aged 55 and above could make a total contribution of up to $600,000.
To be eligible, clients needed to have owned their home for 10 years or more. Downsizer contributions to a maximum of $300,000 did not count towards any of the contribution caps, and could still be made even if a person had a total super balance greater than $1.7m.
Tim Howard, technical consultant at BT, said: “Downsizing can ease cost of living pressures for many Australians: not only does it free up money, the maintenance costs for a smaller home are also usually lower.
“In addition, the ability to make up to $300,000 in downsizer contributions to super tax-free can boost retirement savings significantly. However, as part of retirement planning, clients who are receiving an age pension, or expecting to down the track, should be made aware of how age pension means testing may be impacted.”
Other questions asked by clients included inflation impacts on indexation and the increase to income thresholds for Senior Health card.
