Morgan Stanley
  • Ideas
  • Nov 7, 2018

Downsize Your Living Space; Upsize Your Bank Balance

Leave your empty nest behind and boost your Super coffers in the process.

What would a $300,000 boost to your Super mean to you? New ‘downsizer’ contribution rules that came into effect from 1 July could substantially lessen the nostalgic pains of packing up your precious memories and setting sail on a brand new chapter. 

To most of us, the notion of ‘home’ means more than just bricks and mortar. This is especially true when it’s been the site of our fondest family moments, where our children have grown up inch by inch, and where memories have taken shape against a familiar shared backdrop.

However, when a bustling familial hub transforms into a quiet haven for retirement, the extra space can seem unnecessary and even impractical.

On the list of pros for making the move into a new, streamlined lifestyle, recent legislation could give Australian retirees aged over 65 the ability to contribute up to a further $300,000 per person into their superannuation.

The changes explained

You do not have to meet a work test to make the further contribution as part of the new ‘downsizer’ rulesi, and as the amount does not count towards your non-concessional contribution cap, you can also make the contribution where your account balance exceeds $1.6 million – the funds just remain in an accumulation phase rather than being able to commence a pension.

It’s important to remember that the property you sell must be your principle place of residence, and you need to have owned it for at least 10 years. You will also need to make the contribution within 90 days of settlement. From there, any living arrangement decisions are at your discretion, with downsizing not actually being required. You can feel free to use other funds held outside to spend even more on your new home, although the purchase of a new home is not a requirement.

In good news for couples, the $300,000 limit is per person, translating to a potential superannuation boost of up to $600,000 for paired up retirees, depending on the actual sale proceeds from their home.

The time of your life

Downsizing represents an opportunity to redefine your life, thanks to greater flexibility and fewer responsibilities.

Enjoy financial security and use the time to embrace new interests and connections that may have fallen by the wayside when family and professional commitments came first.


The ability to make a downsizer contribution to super should not be the only reason for selling your family home and should be carefully considered. This strategy, where applicable, could be of an advantage to many clients but appropriate advice should be received in relation to this. 

For more information, please speak to your Morgan Stanley financial adviser. 


iIt should be noted that the actual need to downsize has been omitted from the legislation.