A mid-tier accounting firm has already experienced some interest in the use of the downsizer contribution provisions contained in the 2017 federal budget.
“I did actually have one client that thought she could benefit from the downsizer contribution provision and got all excited, but I told her I needed to check the rules before taking any action,” HLB Mann Judd Sydney wealth management partner Jonathan Philpot said at a media briefing in Sydney earlier in the week.
“[The upshot was] she actually couldn’t do it.
“The house sale has to be after 1 July this year.”
Philpot admitted he did not know how many people would eventually take advantage of the provisions, despite having fielded an inquiry about it before the inception date of the initiative.
“Obviously it’s an advantage if you can put a little bit more into super with that rule in place there,” he said.
“I’m not so sure it will drive the decision [to downsize because] it really is far more of a lifestyle choice of whether to downsize or not.
“I think it’s just really a little bonus if you can put some of that into super.”
The downsizer provisions handed down in the 2017 budget allow individuals 65 years and over who sell their place of residence to contribute $300,000 toward their superannuation fund, regardless of the number of contributions they may have already made during the financial year in question and irrespective of their total super balance during that same year.
The premises sold does not have to be the person’s principal residence at the time of sale, but the property does have to have been owned by the individual for 10 years or more prior to the sale.
Houseboats, caravans and other mobile homes do not qualify for the initiative.
