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The perks of downsizing

Written by Lindsay Harrison
on June 20, 2022

Could the government's new superannuation downsizer incentive benefit you?

If you’re nearing retirement or are simply planning for the future, downsizing from the family home may become an option for consideration.


Part of this consideration should include research into tax penalties following the sale of your home, and how this will affect your pension entitlement when you come of age. In May 2021, the outgoing government announced an incentive (which is supported by the new Labor Government) for Australians to downsize from their family home. Providing short-term gains for existing retirees and long-term gains for couples with an age gap.

Learn how this could benefit you.

What is the current downsizer incentive?

Currently, only people aged 65 and over can make a downsizer contribution towards their personal superannuation. This can be up to $300,000 from the sale (or part sale) of their home.

Incentive rules:

  • To qualify you must be aged 65 or over.
  • You need to have owned your home for at least 10 years.
  • You cannot contribute more than the proceeds from the sale of your home.
  • You must make the contribution within 90 days of settlement.
  • Your home must be in Australia and is not a caravan, houseboat or motorhome.

The amount you contribute to the downsizer incentive is exempt from being pension asset tested up until you reach pension age – 66.5 or 67 years depending on when you were born. At this time, your downsizer contribution will become pension asset tested which could reduce your entitlement.

New superannuation downsizer incentive

The government has announced that from 1 July 2022, the qualifying age for superannuation downsizer contributions will reduce from 65 to 60 years old.
This announcement also includes the introduction of a 2-year pension asset test exemption. So, even if you made the contribution after reaching retirement age, your contribution will remain exempt for the first 2 years.

Furthermore, if you have a spouse who is younger, they will be able to make a downsizer contribution to their own superannuation without it being asset tested. Therefore, if your spouse contributed at age 60, this would equate to 7 years of pension asset exemption.


All the upsides of downsizing to a Ryman village

Downsizing from the family home has many benefits – less rooms to clean, heat or cool, a more manageable sized property. However, what if you could increase those benefits even further.

Long-term savings

There’s a lot to love about the lifestyle at a Ryman retirement village. In terms of costs, along with less rooms to clean, heat or cool, you’ll also reap the reward of no longer having to pay rates. A fixed base weekly fee covers the day-to-day running of your village – it keeps the pool in top shape, the grounds looking gorgeous, and the fun activities flowing. It also covers exterior maintenance of your home, including gardening and window cleaning (inside and out)! So, if your gutters back up or a window is smashed you can sit back and let someone else take care of it.

Lifestyle and security

You can live independently in your own home, but with the support and camaraderie of the surrounding village community. Meet new friends, join organised activities and outings or make the most of the fabulous amenities. It’s all there and it’s all included.

If it’s a sense of security you’re after, having a community on your doorstep offers great peace of mind. You might worry about security when you’re travelling or, even worse, while you’re at home. It could be noisy neighbours, door-knocking salespeople or possibly feeling isolated if you live alone. Living in a village, you’re surrounded by people you know and trust.

Planning ahead

It’s impossible to predict when we might need extra support or even specialist care. For some, a diagnosis could take years to progress to the point where extra support is needed. Along with independent and assisted living, Ryman villages also offer real continuum of care in the form of low care, high care and specialist dementia care, all within the same village community. This offers immense peace of mind for residents.

Downsizing to a Ryman village is a smart way to manage your retirement. It’s a chapter in life that’s filled with possibility. If you’ve lived in the family home for a long time, you’ll have experienced a few life stages along the way. Therefore, it’s worth asking yourself whether your current living situation will enable you to tap into that possibility. Or whether it’s time to make some adjustments so you can make your retirement lifestyle work to the best of your advantage.

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