When clients sell a long-held family home, they may be able to channel part of the proceeds into superannuation by using the downsizer contribution rules.

Basic Eligibility Conditions

To qualify, the seller must meet a number of conditions:

They must have reached the eligible age of 55 years (at the time of making the contribution).
The eligible dwelling must be located in Australia and have been owned for at least 10 years.
The disposal of the dwelling must be exempt from CGT under the main residence exemption to some extent (full exemption not required).
The contribution must be made within 90 days of settlement, and an election form must be lodged with the fund no later than when the contribution is received.

The downsizer contribution can only be used once per individual and is limited to the lesser of the gross sale proceeds or $300,000 per person.

Does the Sale Need to be Fully CGT-exempt?

A common question is whether the sale must be fully exempt as the main residence. Importantly, a full exemption is not required. Even if only part of the capital gain is exempt under main residence rules, the property may still qualify — provided all other conditions are met.

Eligibility of a Non-Owning Spouse

A non-owning spouse may still qualify for a downsizer contribution if all other requirements are met, apart from ownership. However, a spouse who never lived in the property and could not reasonably have treated it as their main residence is unlikely to be eligible.

Preservation and Access to Funds

A downsizer contribution is subject to the standard preservation rules. Once contributed, the amount cannot be accessed until you reach preservation age (60) and retire, or you reach age 65, regardless of retirement status.

Download full Client Newsletter February 2026