Contributing Proceeds From Downsizing To Superannuation
The Government announced from July 1, 2018, a person aged 65 or over will be permitted to make a non-concessional contribution to their superannuation of up to $300,000 from the proceeds of selling their principal place of residence. That residence must have been owned for the past ten or more years. The contributions are to be in addition to contributions currently permitted under existing contribution rules.
The contributions are stated to be exempt from the existing age test, work test and the $1.6 million balance test for non-concessional contributions that may otherwise prohibit the contributions being accepted by the superannuation fund under the current rules. There is a lot of detail that remains unclear including the definition of downsizing and whether you will be required to contribute the actual proceeds from the property sale and whether the contribution amount will be $300,000 per couple or $300,000 each.
Removing the restrictions on non-concessional contributions for people downsizing might help people self-fund their retirement. The proceeds from downsizing a home in this manner are not proposed to be exempt from the Age Pension assets test, which seems to be a missed opportunity to further unlock barriers to downsizing in the current system.
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Other Articles in This Edition:
Some of the Biggest Mistakes Small Businesses Make With Their Websites
Federal Budget – Economic Summary
Small Business - $20k Small Business Immediate Tax Deduction
Small Business - Company Tax Rates
Small Business - Extension of Taxable Payments Reporting to Courier and Cleaning Industries
Small Business - Access to CGT Concessions
Small Business - Looking to Employ Foreign Workers?
Individual Tax Rates
Individuals - Changes to the Medicare levy
Restricting Residential Investment Property Deductions
Individuals - Higher Education Reform
Superannuation - First Home Super Saver Scheme
GST Changes - Purchasers to Pay GST on New Residential Premises
GST Changes - Digital Currency & Low-Value Imports
Tax Integrity Measures
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