Downsizer Contribution to Super 2026: Put $300K Per Person Tax-Free

14 March 2026|5 min read

How the downsizer contribution works in 2026. Eligible Australians aged 55+ can contribute up to $300,000 per person ($600K per couple) to super from the sale of their home, tax-free.

Eligibility: who qualifies for the downsizer contribution?

The downsizer contribution allows Australians aged 55 or older to make a one-off contribution of up to $300,000 per person ($600,000 per couple) to their superannuation from the proceeds of selling their home. To be eligible, you must be 55 years of age or older at the time of making the contribution (the age was reduced from 60 to 55 from January 2023), you or your spouse must have owned the home for 10 years or more, the home must have been your main residence at some point during ownership (it does not need to be your main residence at the time of sale), and you must make the contribution within 90 days of receiving the sale proceeds (settlement date). Importantly, you do not actually need to downsize — you can buy a more expensive home, rent, move in with family, or use the proceeds however you wish. The name is misleading in this regard. You can only make a downsizer contribution in relation to one home in your lifetime (or your share of one home). Both members of a couple can each contribute up to $300,000 from the same home sale, allowing a couple to move up to $600,000 into the superannuation system in a single transaction.

The $300,000 per person cap and how it works for couples

Each eligible individual can contribute up to $300,000 as a downsizer contribution, and this amount does not count towards your concessional ($30,000 per year) or non-concessional ($120,000 per year) contribution caps. This is a major advantage because it allows you to boost your super balance well beyond what normal contribution limits would permit. For a couple selling their family home for $1.2 million, each partner can contribute $300,000 — putting a total of $600,000 into super from a single transaction. The contribution does not need to equal the sale proceeds — you can contribute any amount up to $300,000 per person from the sale. There is no requirement that the contribution equals or is less than your share of the ownership. Even if one spouse owned the property solely in their name, both spouses can make the downsizer contribution provided the other spouse meets the eligibility criteria (age 55+, home was their main residence). The contribution is made using a specific ATO form (Downsizer contribution into superannuation form) that you must provide to your super fund before or at the time of making the contribution. Your super fund reports the contribution to the ATO, and it is not subject to the 15% contributions tax that applies to concessional contributions.

No work test, no age limit, no total super balance test

The downsizer contribution is remarkably free of the restrictions that normally apply to super contributions. There is no work test — unlike non-concessional contributions where people aged 67 to 74 previously needed to meet the work test (40 hours in 30 consecutive days), the downsizer contribution has no work requirement at all. There is no upper age limit — you can make a downsizer contribution at age 75, 85, or even 95, whereas regular non-concessional contributions are generally restricted after age 75. There is no total super balance test — normally, if your total super balance exceeds $1.9 million, you cannot make non-concessional contributions at all. The downsizer contribution has no such cap, so even someone with $3 million in super can add another $300,000. There is no requirement that the money come specifically from the sale proceeds — as long as you sold an eligible property and the timing requirement is met, the funds can come from any source. These relaxed rules make the downsizer contribution one of the most flexible and generous super contribution options available, particularly for retirees and older Australians who are otherwise locked out of making large contributions to super.

Centrelink impact: how downsizer contributions affect the Age Pension

While the downsizer contribution offers significant tax advantages, there is an important trade-off for anyone receiving or expecting to receive the Age Pension. When you sell your home, the proceeds are exempt from the Age Pension assets test for up to 24 months (provided you intend to purchase a new home). However, once you contribute those funds to super, they immediately become assessable under the assets test. Your principal home is exempt from the assets test, but super balances are fully assessable for anyone of Age Pension age. This means that making a $300,000 downsizer contribution could reduce your Age Pension entitlement by approximately $23,400 per year for a single, or $21,900 per year for a couple (based on the current assets test taper rate of $78 per fortnight for every $1,000 over the threshold). For some retirees, this reduction in pension payments can outweigh the benefits of having the money in the super system. The deeming rules also apply to super balances in pension phase, potentially further affecting your pension through the income test. Before making a downsizer contribution, speak with a financial adviser or use Centrelink's online estimators to model the impact on your specific pension entitlements. In some cases, it may be better to hold the sale proceeds outside super — particularly if you have a low super balance and rely heavily on the Age Pension.

When the downsizer contribution makes sense — and when it does not

The downsizer contribution is most beneficial for self-funded retirees who do not depend on the Age Pension and want to maximise their tax-effective savings in super — particularly if their super balance is already above $1.9 million and normal contribution avenues are closed. It also works well for people aged 55 to 67 who are still working and want to boost their super alongside regular contributions, and for couples where one partner has a low super balance and the downsizer contribution can help equalise retirement savings. Cases where the downsizer contribution may not make sense include Age Pension recipients where the assets test impact would reduce pension payments by more than the tax savings, people who need the sale proceeds for immediate living expenses, aged care costs, or debt repayment, situations where the home sale proceeds will be needed within 1 to 3 years (super preservation rules may restrict access, though people over 60 can generally access super freely), and cases where the person has already made a downsizer contribution from a previous home sale (only one lifetime entitlement). The decision is nuanced and depends on your total financial picture — consider consulting a fee-for-service financial adviser to model the long-term outcomes before committing.