Downsizer contributions: the $300,000 side door into super

Australia's super system runs on caps. A cap on what your employer pays in, a cap on what you add from your own money, a cap on how much can ever move into a tax-free pension. Then there's the downsizer contribution, which ignores nearly all of them. Sell a home you've owned for ten years, be 55 or older when the money goes in, and you can put up to $300,000 per person into super. No work test. No upper age limit. There is one catch, and it surfaces at exactly the wrong moment: when Centrelink reassesses your Age Pension.

What is a downsizer contribution?

A downsizer contribution is a one-off super contribution of up to $300,000 from the proceeds of selling your home, available from age 55. A couple can put in up to $600,000 between them, provided the total doesn't exceed the sale price. The money goes in as an after-tax contribution and sits entirely outside the concessional and non-concessional caps.

The name is a fib. Nothing in the rules requires you to buy a smaller place. You don't have to buy anywhere at all. Sell the five-bedroom house, move in with your daughter, rent a unit by the beach: the contribution still stands. The ATO only cares about the home you sold, not where you go next.

Who qualifies? The rules in one table

The conditions are specific, and the ATO applies them as written.

Two of these do the most damage in practice. The 90-day window is shorter than it sounds when you're between houses and the removalists have your filing cabinet. And the once-ever rule means a $50,000 downsizer contribution today spends the same lifetime ticket as a $300,000 one. The age test has a useful quirk, though: it applies when you contribute, not when you sign the contract, so someone who turns 55 inside the 90-day window can wait for the birthday and then contribute.

Why it sits outside every cap

Some context makes the generosity obvious. Standard after-tax contributions (non-concessional, in the jargon) are capped at $120,000 a year in 2025-26, or up to $360,000 under the bring-forward rule if your total super balance allows it. Reach $2.0 million in super and the non-concessional cap drops to nil. You also need to be under 75 at some point in the financial year to make them at all. The full table of contribution caps lives on our data page.

The downsizer skips every one of those tests. No total super balance check, no age ceiling, no work test. A 78-year-old with $2.4 million in super, whose non-concessional cap is exactly zero, can still put $300,000 of house money in. (The standard caps rise to $130,000 and $390,000 on 1 July 2026.)

It isn't invisible afterwards, though. A downsizer contribution counts toward your total super balance, which can shut the gate on future non-concessional contributions. And if you move it into a retirement-phase pension, it uses up transfer balance cap space: the general cap is $2.0 million in 2025-26 and rises to $2.1 million on 1 July 2026.

The Centrelink trap nobody mentions at the auction

The family home is exempt from the Age Pension assets test no matter what it's worth. Our Age Pension assets test guide covers the detail, but the headline is blunt: a $3 million house and a $400,000 unit are treated identically, which is to say ignored. Super is different. Once you're 67, accumulation and pension accounts count in full at market value.

A downsizer contribution therefore performs a magic trick in reverse. It takes money out of the one asset Centrelink can't see and parks it somewhere Centrelink counts to the dollar. Above the assets test free area, every $1,000 costs $3 a fortnight in pension, which is $78 a year. For a homeowner couple the free area is $481,500 and the part pension runs out at $1,085,000 (current from 20 March 2026; both rise again on 1 July 2026).

The ATO's own downsizer page puts it with classic understatement: the contribution “may affect income support payments such as the age pension.” May.

Money inside the family home is invisible to the assets test. The same money inside super is not.

The catch doesn't reach everyone. Under 67, there's no pension to lose yet. Already over the cut-off, nothing changes. The bite lands on the people in the middle: homeowner retirees whose assessable assets end up in the taper zone once the sale proceeds come out from under the roof.

Ray and Glenda: what $600,000 does to the pension

Ray is 71, Glenda is 68, and the Geelong house they bought 26 years ago sells for $1.27 million. They buy a two-bedroom unit for $645,000, and after agent fees and the move, roughly $600,000 remains. Both pass every test in the table above, and within 90 days of settlement they each contribute $300,000. The super side works as designed.

Then Centrelink reruns the assets test. Before the sale, their assessable assets totalled $268,000: $224,000 across their super and pension accounts, $31,000 of car and contents, $13,000 in the bank. That's under the couple free area, so they received the full Age Pension. After the sale, the same test sees $868,000.

That reduction is just over $30,000 a year. They keep a part pension, because $868,000 is under the cut-off, but the contribution now has a running cost that wasn't in the real estate brochure. Centrelink also runs the income test in parallel; for Ray and Glenda the assets test produces the lower payment, and the lower result is the one that gets paid.

None of this makes the move wrong. The $600,000 now earns returns inside super, and in retirement phase those earnings are untaxed. The unit is cheaper to heat than the house was. What the rules do is set a price: $78 a year for every $1,000 over the line. Run a before-and-after through our Age Pension calculator while the property is still listed, not after the contract is signed.

The paperwork and the clock

The form is the downsizer contribution form, NAT 75073, and your fund needs it before or when the money arrives, not after. You can split the contribution into several payments, provided each lands inside the 90 days and each comes with its own form. Funds report downsizer contributions to the ATO within 10 business days.

The window starts when you receive the proceeds, which usually means settlement day. The ATO can grant an extension where circumstances justify it, but not so you can reach age 55. The age test applies at the moment you contribute, and no amount of paperwork moves it.

If a sale is on the cards, the checklist is short. Ten years of ownership. Age 55 by the day the contribution goes in. NAT 75073 ready for the fund. A calendar reminder set for day 80, because the deadline is 90 days, the ticket is once per lifetime, and neither rule bends.