Access to the downsizer contribution scheme will be extended from age 65 to 60 from the middle of next year as part of a range of retirement savings measures introduced in last night’s federal budget.
The move had been widely reported before the budget was announced and during his budget speech, Treasurer Josh Frydenberg said it would free up more housing stock for younger families.
A superannuation fact sheet released as part of budget papers stated the lower age limit “improves the flexibility for Australians to contribute to their superannuation savings and may encourage people to downsize sooner and increase the supply of family homes”.
BDO director and SMSF specialist Mark Wilkinson said the change was good for those selling family homes, but would have limited impact on housing supply.
“It is a useful change to get funds into retirement as it allows people to put surplus funds into superannuation that are not subject to the transfer balance cap,” Wilkinson told selfmanagedsuper.
“However, it is window dressing for the housing bubble and, as we have seen so far, will have negligible impact in getting young people into one of these homes.”
SuperConcepts SMSF technical and strategic solutions executive manager Philip La Greca said the change could free up property where someone held two properties.
“They will be moving from an asset test exempt situation with property to superannuation that does not have that exemption, so they will need to plan around what they have and where they want to live,” La Greca told selfmanagedsuper.
“For older people it creates more opportunities to use the downsizer contribution and to create liquidity in retirement from a non-liquid asset.”
The measure is expected to start from 1 July 2022, and is dependent on legislation passing through federal parliament and receiving royal assent before that date.
