The Rules
| Rule | Detail |
|---|---|
| Minimum age | 55+ (reduced from 60 in 2023) |
| Maximum contribution | $300,000 per person ($600,000 per couple) |
| Counts toward caps? | No — separate from all other contribution caps |
| Home ownership requirement | Must have owned the home for 10+ years |
| Timing | Must contribute within 90 days of settlement |
| How many times? | Once per person, ever (one home) |
Why It's Powerful
For retirees or near-retirees with most of their wealth in their home, this converts a non-income-producing asset (your home) into a tax-effective income stream (super pension). Inside an account-based pension, investment earnings are tax-free.
Example
A couple sells their $1.2M family home and buys a $700,000 apartment. They each put $300,000 into super ($600,000 total). This money then earns returns in a tax-free pension environment — potentially adding $30,000–$50,000/year in investment income with zero tax.
Impact on Age Pension
The $300,000 goes into super, which counts as an asset in the Age Pension assets test. It also generates deemed income in the income test. This may reduce your pension. Get financial advice before making a downsizer contribution if you're receiving or planning to receive the Age Pension.
Frequently Asked Questions
Can both partners contribute $300,000?
Yes. Each person can contribute up to $300,000 from the sale of the same home, for a total of $600,000 per couple.
Does it affect my pension?
Yes — the money becomes a financial asset, counted in both the assets and income tests. It may reduce your Age Pension. Get advice first.