The SMSF Association has applauded the federal budget provision that will allow retirees to contribute up to $300,000 from the sale proceeds of their homes when downsizing as a non-concessional superannuation contribution regardless of their $1.6 million total super balance.
The ability to make this type of contribution will not be constrained by an age test or work test either.
“This measure will apply from 1 July 2018 to sales of a principal residence owned for the past 10 or more years and both members of a couple will be able to take advantage of this measure for the same home,” SMSF Association chief executive John Maroney said.
“This will allow a couple to contribute up to $600,000 from the sale of their home to superannuation outside of the existing caps and balance restrictions.
“This means people can make a significant top-up contribution to their super funds, allowing them to fund a dignified and secure retirement. While the measure may not be a significant trigger to encourage downsizing, we welcome the ability for older Australians to top up their superannuation where downsizing their home provides them with funds to do so.”
The industry body also gave its approval to the other housing affordability initiative in the budget whereby individuals can salary sacrifice a maximum of $30,000 into their super fund to help finance the purchase of their first home.
“This scheme offers superannuation funds, including the SMSF sector, an excellent opportunity to engage younger fund members in their superannuation,” Maroney said.
“The first home buyers’ proposal strikes the right balance between encouraging young people to save for a first home deposit in a concessional tax environment, but also protecting their retirement savings for the longer term.”
The association was also appreciative that, apart from these developments, superannuation was relatively unaffected by last night’s budget, saying it provided much needed system stability and would provide SMSF practitioners with a more reasonable amount of time to manage the changes to the retirement savings system passed as law late last year.
