The commencement date is 1 January 2023 if Royal Assent is received prior to this date, otherwise it is likely to be 1 April. We will update you when the commencement date is confirmed.
All other eligibility requirements for downsizer contributions remain unchanged.
Advice implications
Eligible downsizer contributions must be made within 90 days after settlement occurring. This means if the age requirements are met within that 90 day period, the opportunity to make a downsizer contribution exists. Clients aged 55 to 59 should not make downsizer super contributions before the confirmed commencement date, as the contribution will be an invalid downsizer contribution.
For example, let’s assume the:
- commencement date for the legislation is 1 January 2023 and all eligibility criteria is met
- client is aged 58 and sold their home on 3 September 2022, and
- property settled on 15 October 2022.
The contribution must be paid within 90 days from settlement which is by 13 January 2023. For this client, the contribution would need to be made on or after 1 January but before 13 January 2023.
Note that while the ATO has discretion to provide an extension to the 90 day window to make a downsizer contribution, it has stated that an extension will not be provided to enable a person to meet the age requirement.
It is also important to note that a valid notice to treat the contribution as a downsizer contribution must be submitted no later than the time the contribution is received by the fund. It is not possible to retrospectively elect to treat a personal contribution as a downsizer contribution.
Pieter Botha
phb financial planning
phb Financial Planning Pty Ltd and Pieter Botha are Authorised Representatives of the Lionsgate Financial Group Pty LTD. [ABN 92 140 591 484, AFSL No. 591 484] General Advice Warning: In preparing any advice in this communication, we have not taken into account any particular person’s objectives, financial situations, or needs. You should, before acting on this information, consider the appropriateness of this information having regard to your personal objectives, financial situation, or needs. We recommend you obtain financial advice specific to your situation before making any financial investment or insurance decision.
