New super tricks for the election

The Coalition, on the weekend, unveiled their latest policy to encourage older Australians to downsize their homes.

The announcement – which is two pronged – firstly allows  those eligible to take advantage of existing tax breaks from the sale of their home, as well as encouraging pensioners to downsize by providing a two-year assets test exemption on the proceeds received from sale (where they are in receipt of the age pension)

As detailed in previous blogs, the downsizer contribution allows eligible individuals to make a one-off, post-tax contribution of up to $300,000 to their super. The eligibility age will reduce from 65 to 60 on 1 July 2022. Under the proposed policy from the Coalition, this age will be reduced further to 55 years and over, potentially allowing more people to access the tax benefit and boost their superannuation benefits.

Under the second prong of their announcement, the Coalition proposes to provide pensioners who sell their family home and are in receipt of the age pension, a two-year exemption from the assets test of the sale proceeds, allowing them time to structure their assets. This is an extension from the current one-year grace period, effectively doubling the amount of time pensioners have to sell and re-purchase a home without it affecting their aged pension.

Both of these proposed policies have received bi-partisan support. If re-elected, the proposal is slated to commence on 1 January 2023.

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Disclaimer: The information contained is general in nature. Professional advice should be sought before acting on any aspect on this page. Financial planning services provided by TAG Financial Advisors Pty Ltd (ABN 77 154 205 017 AFSL 415632), a wholly owned subsidiary of TAG Financial Services Pty Ltd (ABN 67 075 374 686). Copyright 2022. Please do not reproduce without the expressed written consent of the author.