Australians aged 65 years and over might want to downsize to a smaller living space and this has its benefits thanks to a new law passed by the Australian government.
After a proposal in the May 2017 Budget, in December 2018 a new law passed which will be effective from the new financial year 2019.
From 1 July 2018, older Australians may choose to add to their superannuation accounts using the profit from the sale of their family home. If you’ve owned your primary property for 10 years or longer, and the property is in your name as your main residence (exempt from Capital Gains Tax (CGT)), then up to $300,000 of the profit-from-sale may be added to your superannuation account as an after-tax contribution.
This is an attractive incentive for those retirees wanting to access their equity in their home to enjoy their retirement years with more money to live or, when the time comes, to support themselves with in-home care.
If you are a couple, then the new law entitles each of you to contribute up to $300,000, thus giving you both up to $600,000 towards your superannuation. Even more enticing, this after-tax contribution may be made in addition to your voluntary contributions made under the existing after-tax contributions cap.
The new law does not require you to purchase a new property after the sale of your current main residence, so your living arrangements would be your choice and entirely up to you to decide upon. What might you do to improve your retirement?
For more detailed information about and the legal parameters of this new possibility for you to improve your retirement standard of living through downsizing your residence to upsize your superannuation pool, please consult your accountant.
How can YML help?
Talk to our YML Super Solutions Team today to see how YML Group can assist you with your superannuation contributions. Contact us on (02) 8383 4400 or by visiting the Contact Us page on our website.