Downsizing super contribution tops list of queries

The new downsizing superannuation contribution rules topped the list of the almost 3,000 queries to BT Financial Group’s Technical team in the September quarter.

The downsizing contribution was announced in the 2017/18 Budget, and started on 1 July 2018. It allows eligible older people to make an extra contribution to super of up to $300,000 when they sell their home – with a number of conditions.

“The downsizer strategy has received the most attention in terms of interest from advisers and clients, given its availability as a contribution strategy since 1 July this year,” said BT’s Advice Technical Consultant Tim Howard. Read more...

Age pension larger downsizing factor than downsizer super contribution

Potential downsizers are worried about the impact on their Age Pension, which may limit the take-up of the Government’s proposed downsizer contribution, according to new research.

Legislation is currently before the Parliament to enact the ‘downsizer contribution’, which would allow some people aged 65 and older who downsize to contribute extra to superannuation without some of the existing restrictions.

Almost 90% of people planning to downsize their home are aware of the Government’s announced downsizer contribution, but only 24.1% said it would encourage them to downsize, according to research by National Seniors Australia. A survey of its members found, of those who owned their home, 33.9% were ‘movers’- they had already downsized – 24% planned to move at some point as they age and 42.1% were ‘stayers’ – they didn’t plan to move. Read more...

LDP wants considerable boost to FHSSS and downsizer contribution

Liberal Democrat Senator David Leyonhjelm wants to considerably boost the proposed First Home Super Saver Scheme (FHSSS) and downsizer contribution.

Update: The Leyonhjelm amendment has been revised – it not longer includes the changes to the cap, instead including a requirement that the Minister start an independent review of the changes in the Bill. This review would be started, as soon as practicable, 18 months after Royal Assent and to be completed within 6 months.

The Senator has proposed an amendment which would raise the yearly contribution cap for the FHSSS from $15,000 to $30,000 and the total cap from $30,000 to $100,000. The amendment would also remove the requirement that the person had never held a home, replacing it with a requirement that they don’t currently own a home. Read more...

FHSSS and downsizer contribution Bill introduced to Parliament

Bills to enact the First Home Super Saver Scheme and downsizer contribution have been introduced to Parliament.

These measures, which were announced in the 2017, are aimed at improving housing affordability. Though Labor has criticised both the policy and the delay between the announcement and the introduction of legislation.

Treasurer Scott Morrison said the Government is “moving forward” on the housing affordability package from the Budget.

“The FHSSS [First Home Super Saver Scheme] legislation will enable prospective first home buyers to save for a deposit inside their superannuation account. This will be a game changer for young Australians trying to get their first place,” he said. Read more...

Downsizing super exemption not enough without age pension exemption

A possible Budget measure to exempt the proceeds of downsizing homes from the superannuation contribution caps will not be effective without there also being an exemption from the age pension tests, says National Seniors Australia.

The Government is reportedly considering allowing people who downsize their homes to contribute an amount to superannuation outside of the non-concessional contribution caps or the Transfer Balance Cap in the upcoming 2017/18 Budget. Though this would not be eligible for an exemption from the age pension tests. Read more...

Proceeds from downsized home may be exempted from super caps in Budget

The Government is reportedly considering allowing exemptions from contributions caps and the Transfer Balance Cap for people who downsize their home and contribute the proceeds to superannuation.

This is the latest in a series of pre-budget reports. Most recently there were reports of different ways in which first home buyers may be allowed to access their superannuation, though these ideas may have been dropped.

According to a report in the Australian Financial Review the Government may include in the Budget an exemption from the $1.6 million Transfer Balance and the non-concessional contributions caps from the sale of a “large family home”. Read more...