Downsizer contribution to super, how selling your home can boost your retirement

Table of contents

• What is a downsizer contribution
• Eligibility requirements you need to meet
• How much you can contribute
• Tax benefits and super advantages
• Age pension and Centrelink implications
• The Melbourne property angle
• Downsizing decisions beyond the money
• Step by step process for making your contribution
• Common mistakes to avoid
• Planning your downsizing strategy
• How Hidden Gems Property Scouts can help

Sitting in your family home in Sunshine or Caroline Springs, you might be looking around at rooms your kids haven’t slept in for years. The garden’s getting harder to manage, the gutters need cleaning again, and you’re wondering if now’s the right time to make a change. If you’re 55 or older and thinking about selling up, there’s a financial opportunity you need to know about: the downsizer contribution to superannuation.

This government scheme lets you move up to $300,000 from your home sale straight into your super fund. If you’re married or in a de facto relationship, that’s potentially $600,000 between the two of you. Better yet, this money doesn’t count towards your usual contribution caps, and you won’t pay the standard 15% contributions tax on it.

The downsizer contribution isn’t just about boosting your retirement savings. For many Melbourne retirees, it’s the bridge between selling a large family home and moving into something more manageable, all while securing your financial future. Whether you’re eyeing a low-maintenance townhouse in Point Cook or a modern villa unit in Hoppers Crossing, understanding how this scheme works can make a real difference to your next chapter.

Let’s walk through everything you need to know about downsizer contributions, from eligibility rules and tax benefits to how the Melbourne property market fits into your planning.

What is a downsizer contribution

A downsizer contribution lets you put money from selling your home into your superannuation fund. The Australian Taxation Office created this scheme to help older Australians boost their retirement savings when they sell their main residence.

Here’s what makes it different from other super contributions: you can add up to $300,000 per person to your super from the sale proceeds, and this money sits outside the normal contribution caps. For most Australians, non-concessional contributions are capped at $120,000 per year (or up to $360,000 if you use the bring-forward rule). Downsizer contributions ignore these limits entirely.

Think of it as a one-time financial opportunity tied to selling your home. You don’t need to be retiring, you don’t need to buy a smaller property, and you don’t even need to be finished working. The name “downsizer” is a bit misleading - you could sell your family home and move into a luxury apartment, or even rent for a while. What matters is meeting the eligibility requirements and getting the money into your super fund within the right timeframe.

The scheme recognises that many Australians have significant wealth tied up in their homes. For baby boomers who bought in Melbourne’s western suburbs decades ago, that family home might now be worth several times what you paid. The downsizer contribution gives you a way to convert some of that property wealth into retirement income, all while enjoying tax advantages that regular super contributions don’t offer.

You can only make one downsizer contribution in your lifetime, so it’s worth getting it right. Once you’ve used this opportunity from selling one property, that’s it - you can’t do it again if you sell another home later.

Eligibility requirements you need to meet

The downsizer contribution has specific rules, and you’ll need to tick every box before your super fund can accept the money.

Age requirement

You must be 55 years or older when you make the contribution to your super fund. There’s no maximum age limit.

If you’re 75, 85, or even 95, you can still make a downsizer contribution. This is one of the few super contributions that people over 75 can make without meeting a work test.

The age requirement changed on 1 January 2023 when it dropped from 60 to 55. If you’re between 55 and 59, you’re part of the group that benefited from this change.

Ownership period

You or your spouse must have owned the property for at least 10 years before selling it. The ATO measures this from the settlement date when you bought the property to the settlement date when you sell it.

Let’s say you bought your home on 15 March 2013. You’d need to wait until at least 15 March 2023 before the settlement of your sale for it to qualify. If settlement happens on 14 March 2023, you’re one day short and the contribution won’t be eligible.

The 10-year ownership can be in your name, your spouse’s name, or a combination. If your spouse owned the home for eight years before you married, then you owned it jointly for another three years, that counts as more than 10 years of ownership.

Main residence and capital gains tax exemption

The property must be your main residence or former main residence. It needs to be fully or partially exempt from capital gains tax under the main residence exemption. If you bought the property before 20 September 1985 (a pre-CGT asset), it would need to be entitled to the exemption if it were a CGT asset.

This means investment properties don’t qualify. Your holiday house at the beach doesn’t qualify either, even if you’ve owned it for 20 years. The property must be the place you’ve called home.

Partial exemption is fine. If you used part of your home to run a business, or if you rented it out for a period while you lived elsewhere, you might only have partial CGT exemption. That’s still acceptable for downsizer contribution purposes.

Property type and location

Your home must be in Australia. It cannot be a caravan, houseboat, or any other mobile home. A house, unit, apartment, or townhouse all qualify, as long as they’re permanently fixed to Australian land.

The 90-day contribution window

You must make your contribution within 90 days of receiving the sale proceeds. For most people, this means 90 days from the settlement date. This is a strict deadline, and it catches out quite a few people.

If you settle on your property sale on 1 February, you have until 2 May to get the money into your super fund. If you’re planning to buy another property first and the timing is tight, you could miss the window.

The ATO can grant extensions in exceptional circumstances - things like serious illness, natural disasters, or legal disputes that prevented you from making the contribution on time. These extensions aren’t automatic. You’ll need to call the ATO on 13 10 20 and make your case.

One contribution per person

You can only make one downsizer contribution in your lifetime. If you sell your family home and make a contribution, then later sell a holiday house that also qualifies, you cannot make another downsizer contribution from that second sale.

This is per person, not per couple. If you make a downsizer contribution from selling your home in Caroline Springs, and five years later you inherit a property from your parents and sell it, you cannot make another downsizer contribution from that inherited property.

Ownership scenarios

The rules accommodate different ownership situations. If only one spouse owned the property but both of you lived there as your main residence, both spouses can make downsizer contributions. The spouse whose name isn’t on the title still needs to meet all the other eligibility requirements, including being 55 or older and making the contribution within 90 days.

For couples selling jointly owned property, you can split the contributions however you like, as long as neither person contributes more than $300,000 and your combined contributions don’t exceed the sale proceeds.

How much you can contribute

The maximum downsizer contribution is $300,000 per person. If you’re part of a couple, that’s $600,000 combined. But there’s a cap based on your actual sale proceeds.

The sale proceeds rule

Your total downsizer contributions - yours and your spouse’s combined - cannot exceed the proceeds you received from selling the home. The sale proceeds mean the actual sale price, not the amount you receive after paying off debts or covering sale costs.

Here’s an example: You sell your western suburbs home for $950,000. You still owe $150,000 on the mortgage and pay $25,000 in agent fees and other selling costs. Your net proceeds are $775,000, but your sale proceeds for downsizer purposes are the full $950,000. Both you and your spouse can contribute the maximum $300,000 each.

Now a different scenario: You sell your home for $500,000 with no mortgage. Both you and your spouse want to make downsizer contributions. Your combined contributions cannot exceed $500,000. You might contribute $300,000 and your spouse contributes $200,000. Or you could split it $250,000 each. The choice is yours, as long as neither person goes over $300,000 and your total doesn’t exceed $500,000.

Contribution splits for couples

You have complete flexibility in how you divide contributions between spouses. Some couples equalise their super balances by having the spouse with less super receive a larger downsizer contribution. Others maximise tax-free components or think about Age Pension implications when deciding the split.

There’s no requirement to divide it equally. A couple selling their home for $800,000 could have one spouse contribute $300,000 and the other contribute $200,000, leaving $300,000 for other purposes like buying their next home or investing elsewhere.

Combining with other contributions

Downsizer contributions don’t count towards your non-concessional contribution cap, which means you can make both in the same financial year if you’re eligible.

The non-concessional cap is currently $120,000 per year, or up to $360,000 if you trigger the bring-forward rule. If you’re under 75 and your total super balance on the previous 30 June was under $1.9 million, you could potentially add $300,000 as a downsizer contribution plus another $360,000 as non-concessional contributions. That’s $660,000 into super in one year.

This strategy needs careful planning. Your total super balance on 30 June determines your eligibility for non-concessional contributions in the following financial year. If you make a downsizer contribution early in the financial year (say, in July), your super balance will be higher, but your eligibility for that year’s NCCs is still based on the previous 30 June balance.

This is exactly the type of situation where you’d want advice from a financial planner before making any moves.

Tax benefits and super advantages

The downsizer contribution delivers several tax and super benefits that regular contributions don’t offer.

No contributions tax

When you make a downsizer contribution, you’re putting after-tax money into your super fund. Your super fund doesn’t deduct the usual 15% contributions tax that applies to concessional contributions like employer super or salary sacrifice.

If you contribute $300,000, the full $300,000 goes into your super account. With a concessional contribution of the same amount, you’d lose $45,000 to contributions tax, leaving you with $255,000.

Doesn’t count towards contribution caps

This is the big advantage. Your downsizer contribution sits completely outside the concessional cap ($30,000 per year) and the non-concessional cap ($120,000 per year, or up to $360,000 with bring-forward).

For most Australians, getting large amounts into super is difficult because of these caps. The downsizer contribution opens a pathway to add substantial funds in one go, which is particularly valuable if you’re approaching retirement and want to maximise your super balance.

Increases tax-free component

Every dollar in your super account is classified as either tax-free or taxable. This classification matters when you withdraw money in retirement or when your super is distributed to non-dependent beneficiaries after you die.

Downsizer contributions are added to the tax-free component of your super. This increases the proportion of your super that can be withdrawn completely tax-free or passed to adult children without death benefits tax.

Let’s say you have $400,000 in super, with a tax-free component of $100,000 and a taxable component of $300,000. You make a $300,000 downsizer contribution. Your new balance is $700,000, with a tax-free component of $400,000 and a taxable component of $300,000. Now 57% of your super is tax-free, compared to 25% before.

Estate planning benefits

When super passes to non-dependent beneficiaries (usually adult children), the taxable component can be taxed at up to 17%. By increasing your tax-free component through a downsizer contribution, you reduce the tax your estate might pay.

If your super balance is $600,000 with a taxable component of $450,000 when you die, and it goes to your adult daughter, she could face tax of around $76,500 on that taxable component. If you’d made a $300,000 downsizer contribution that increased your tax-free component, the taxable component would only be $150,000, and the tax would drop to around $25,500.

Transfer balance cap

While downsizer contributions don’t count towards contribution caps, they do count towards your transfer balance cap when you start a retirement pension. The transfer balance cap is currently $2 million per person.

Think of this cap as a limit on how much super you can move into the tax-free retirement phase. If you’re planning to make a large downsizer contribution and you already have substantial super, you might end up with more than $2 million in super but only be able to move $2 million into pension phase.

The excess would stay in accumulation phase, where earnings are taxed at 15% instead of 0%. For most people this isn’t a problem, but it’s worth being aware of if you’re dealing with large balances.

Age pension and Centrelink implications

Adding money to your super through a downsizer contribution affects your Age Pension eligibility, and the impact can be significant.

Asset test impact

Centrelink counts your super balance as an asset for Age Pension purposes once you reach Age Pension age. If you’re receiving or planning to receive the Age Pension, adding $300,000 or $600,000 to your super increases your assessable assets.

Under the assets test, a homeowner couple can have up to $451,500 in assets (excluding the family home) and still receive a part Age Pension. For every $1,000 over this threshold, your pension reduces by $3 per fortnight combined.

Here’s how it works in practice: If a couple has $350,000 in assessable assets and makes a combined $600,000 downsizer contribution, their assessable assets jump to $950,000. They’d be $498,500 over the threshold, reducing their Age Pension by around $1,495 per fortnight. Depending on their situation, they might lose the Age Pension entirely.

Timing strategies

Some retirees use timing to manage Age Pension impacts. You could delay your downsizer contribution until you’ve settled into your new property, giving you time to understand how the numbers work.

Others make the contribution early in a financial year to maximise the time their super earnings compound in the tax-advantaged environment, accepting that they’ll receive less Age Pension.

There’s also a temporary exemption for proceeds from selling your main residence. If you’re planning to buy another home, Centrelink can exempt the sale proceeds from the assets test for up to 12 months, giving you time to purchase without immediately affecting your pension.

When to get advice

The interaction between downsizer contributions and the Age Pension is complicated. If you’re receiving the pension or expect to qualify for it in the near future, speak with a financial adviser before making a downsizer contribution. They can model different scenarios and show you the long-term impact on your pension entitlements versus the benefits of having more in super.

For some people, the Age Pension reduction is worth it because the super earnings and tax advantages outweigh the lost pension income. For others, particularly those with modest super balances, keeping money outside super might deliver better overall income in retirement.

The Melbourne property angle

Melbourne’s western suburbs in 2026 present specific opportunities and considerations for anyone thinking about downsizing and making a super contribution.

Current market conditions

Melbourne property values have fallen around 10% since January 2024, making it one of the more affordable capital cities relative to recent peaks. For retirees who bought decades ago in Melbourne’s western suburbs, this doesn’t diminish the substantial equity they’ve built. A home purchased in Sunshine for $80,000 in the 1980s might now be worth $700,000 to $900,000, even with recent price softness. In growth areas like Point Cook or Tarneit, properties bought 15 to 20 years ago have seen remarkable appreciation.

This market correction has created what property experts call a counter-cyclical opportunity. If you’re selling to downsize, you’re still capturing decades of growth. If you’re also buying a smaller property in Melbourne’s west, you’re purchasing in a market that’s offering better value than it did 18 months ago.

Interest rate cuts started flowing through in early 2025, and most analysts expect Melbourne’s property market to recover through 2026. If you’re planning to downsize, acting while the market is still adjusting could work in your favour, particularly if you’re buying as well as selling.

Average equity release

Research shows older Australians who downsize release an average of $287,000 in equity. In Melbourne’s western suburbs, where many retirees have owned homes through decades of suburban expansion and infrastructure investment, the equity release can be substantial.

A couple selling a four-bedroom family home in Deer Park for $850,000 and buying a two-bedroom villa unit in the same area for $450,000 might release $400,000 (after selling costs and before buying costs). With $600,000 going into super as downsizer contributions from a combination of this equity and other savings, they’ve substantially boosted their retirement savings while staying in their familiar community.

In Point Cook, where median house prices sit around $750,000 to $850,000, downsizers moving into townhouses or apartments in the $500,000 to $600,000 range are releasing similar amounts of equity.

Melbourne’s western suburbs for downsizers

The western suburbs of Melbourne offer compelling advantages for downsizers. These areas combine more affordable property prices than the eastern suburbs, strong community connections, improving infrastructure, and excellent access to healthcare facilities.

According to recent property analysis, 85% of Australians aged 55 and older live in homes with two or more spare bedrooms, with Melbourne’s western suburbs showing particularly high levels of underutilised housing stock. This represents significant opportunity for retirees ready to unlock their home equity.

Sunshine has undergone significant transformation in recent years. The Sunshine Hospital precinct provides world-class healthcare access, while the redeveloped Sunshine station offers express trains to the CBD in under 15 minutes. The area has diverse shopping options along Hampshire Road and increasingly popular cafes and restaurants. For retirees who’ve lived in Sunshine or nearby suburbs for decades, the familiar community combined with modern amenities makes it an attractive place to stay.

Point Cook appeals to downsizers with its coastal proximity, Sanctuary Lakes lifestyle precinct, and modern housing stock. The area has purpose-built retirement villages and newer townhouse developments that suit the low-maintenance lifestyle many retirees want. The trade-off is that Point Cook is a relatively young suburb without the deep community roots of longer-established areas.

Caroline Springs offers a master-planned community feel with the Caroline Springs Town Centre, extensive walking and cycling paths around the lake, and a strong sense of community. Downsizers here often move from larger homes in the estate into townhouses or villas within the same suburb, maintaining their social connections and familiar surroundings.

Hoppers Crossing and Werribee provide practical advantages - proximity to Werribee Mercy Hospital, the Werribee Plaza shopping centre, and improving public transport connections. These suburbs have established communities where retirees have lived for 20 or 30 years, raised families, and built social networks they’re reluctant to leave.

Deer Park, St Albans, and Sunshine North attract downsizers looking for value. Properties here cost significantly less than inner Melbourne, meaning the equity released from downsizing goes further. A couple selling a $750,000 home and buying a $400,000 townhouse releases more capital than someone in a more expensive suburb making a similar property transition.

Altona and Altona Meadows offer beachside lifestyle without the premium prices of suburbs like Brighton or Elwood. The coastal location, established parks, and village atmosphere appeal to retirees wanting morning beach walks and a slower pace.

Western suburbs infrastructure investment

The western suburbs are benefiting from substantial infrastructure investment that’s improving liveability for retirees. The Metro Tunnel project will eventually provide better train connections. The Western Distributor improves road access. Investment in Sunshine as a transport and health hub continues.

The Western Rail Plan includes upgrades to stations across the corridor, making public transport more accessible for retirees who may be driving less. For downsizers, this infrastructure development means the western suburbs they’ve called home for decades are becoming even more connected and accessible.

The gap in amenities between east and west is narrowing, while property prices in the west remain 20-40% more affordable than comparable eastern suburbs. This value proposition is attracting younger retirees (those in their late 50s and early 60s) who are downsizing early to free up capital for travel and lifestyle while they’re still active.

Staying local in the west

Property research shows that retirees overwhelmingly prefer to stay within two to three kilometres of their current suburb. Someone living in Deer Park is unlikely to downsize to Altona, even though both are in the western suburbs. The familiar faces at the local shops, the GP who’s treated you for 20 years, your bowling club, and your church or community group all matter more than many people realise.

This local preference has implications for your property search in Melbourne’s west. You’re not just looking for any low-maintenance home; you’re looking for the right property in a tight geographic area. That narrows your options and makes expert local knowledge valuable.

Property types in demand

Downsizers in the western suburbs are looking for low-maintenance, single-floor dwellings. The appeal of not having to climb stairs, not having to mow a large lawn, and not having to clean gutters is real.

In suburbs like Point Cook, Tarneit, and Williams Landing, newer townhouse developments with contemporary design and low body corporate fees are popular. In more established areas like Sunshine, Footscray, and Deer Park, villa units in small complexes of six to twelve dwellings are sought after.

The challenge in some western suburbs is that much of the housing stock consists of larger family homes on decent-sized blocks. In areas like Caroline Springs or parts of Hoppers Crossing, finding a well-designed, contemporary townhouse or villa unit within your preferred neighbourhood can take time. Supply of suitable downsizer properties often doesn’t match demand.

Western suburbs value proposition

The western suburbs offer something eastern Melbourne suburbs don’t - the ability to downsize while releasing substantial equity without compromising on property quality. A retiree selling a family home in Deer Park for $800,000 can buy an excellent townhouse or villa unit for $450,000 to $550,000, releasing $250,000 to $350,000 in equity even after transaction costs.

Compare this to someone in Glen Waverley or Camberwell, where a similar family home might sell for $1.8 million, but a suitable downsizer property costs $1.2 million. Both release equity, but the western suburbs downsizer has more flexibility in how they allocate funds between super contributions and other retirement needs.

Market timing

Unlike upsizers or first home buyers who might wait years for the perfect market conditions, downsizers often have more flexibility around timing. You might be thinking: “Should I wait for the market to recover?” But if your home is becoming too much to manage, or if you’re ready for a lifestyle change, waiting for the market to peak might mean missing years of the retirement lifestyle you’re looking forward to.

That said, making your sale and purchase in a flat or falling market can work to your advantage. You’re selling in a softer market, but you’re also buying in that same market. If you’re reducing your property footprint (say, from an $850,000 home to a $500,000 townhouse), the dollar difference in a flat market can still be substantial.

The western suburbs have seen strong growth over the past decade, driven by infrastructure investment and population growth. While recent market softness has affected values, the long-term trajectory for well-located western suburbs remains positive.

Downsizing decisions beyond the money

The financial benefits of a downsizer contribution are clear, but the decision to sell your family home involves more than numbers on a spreadsheet.

Lifestyle benefits

A smaller home means less time spent on maintenance. No more weekend gardening if you don’t want it. No more roof repairs, gutter cleaning, or painting weatherboards every few years. For many retirees, this liberation of time is worth more than the financial gain.

Modern townhouses and apartments often include amenities like gyms, pools, and communal gardens that you can enjoy without having to maintain. Security features like intercom systems and gated entries provide peace of mind, particularly if you plan to travel.

Single-floor living removes the risk of stairs. As you age, a home where everything is on one level isn’t just convenient - it can be the difference between aging in place and having to move again later.

Reduced ongoing costs

Smaller properties cost less to heat and cool. Water bills drop. Council rates are usually lower. Home insurance premiums decrease. These ongoing savings add up, and they continue year after year.

Some retirees find that their reduced housing costs more than offset any reduction in Age Pension they experience from making a downsizer contribution. The combination of lower bills and higher super income leaves them better off overall.

Community and amenity

The neighbourhood you move to matters as much as the home itself. Proximity to shops, cafes, libraries, and medical facilities affects your daily life. Public transport access matters more when you’re not driving as much.

Some Melbourne suburbs have active communities for retirees, with regular social events, exercise classes, and volunteer opportunities. Others are more oriented towards young families or professionals. Visiting at different times of day, talking to locals, and spending time in the area before committing helps you understand whether a suburb will suit your lifestyle.

Emotional aspects

Leaving a home where you raised your children, celebrated milestones, and built memories isn’t easy. Many retirees tell us this is the hardest part of downsizing, even when they know it makes financial and practical sense.

Giving yourself time to process these emotions, involving family in the decision, and focusing on the new experiences your next home will bring all help. Some people find it useful to downsize in stages - maybe sorting through possessions over several months rather than rushing the process.

Alternative options

Downsizing isn’t the only option. Some retirees renovate their existing home to make it more suitable for aging in place. Installing a walk-in shower, widening doorways, adding a bedroom on the ground floor, or creating a self-contained area can extend how long you can stay in your current home.

Others use their home equity without selling by taking out a reverse mortgage. This gives you access to funds for aged care or living expenses while letting you stay in the family home.

These alternatives don’t give you access to the downsizer contribution scheme, but they might suit your situation better depending on your priorities and circumstances.

When downsizing makes sense

Downsizing typically makes the most sense when you’re genuinely ready for the lifestyle change, when your home is becoming difficult to maintain, when you want to boost your retirement savings, or when you’re planning to relocate to be closer to family or amenities.

It makes less sense if you’re only doing it for the downsizer contribution and don’t actually want to move, if you’re likely to regret leaving your community, or if the property market in your area is particularly soft and waiting a year or two would significantly improve your sale price.

Step by step process for making your contribution

Making a downsizer contribution involves several steps, and the timing matters. Here’s how to do it properly.

Timing your property sale

Start by understanding the 90-day window. Count 90 days from your expected settlement date and work backwards. If you settle on 15 March, you have until 13 June to make your contribution. Mark this date in your calendar and set reminders.

If you’re buying another property, make sure the timing works. Some people settle their sale before securing their purchase, giving them the funds to make the downsizer contribution while they’re still house-hunting or waiting for their new property to settle.

Calculating your eligible amount

Work out your maximum contribution before you commit to anything. If you’re single, you can contribute up to $300,000, but not more than the sale proceeds.

If you’re part of a couple, your combined contributions cannot exceed the sale proceeds, and neither of you can contribute more than $300,000 individually.

Get clear on what counts as sale proceeds. It’s the gross sale price, not what you receive after paying off debts or costs. If you sell for $850,000, you owe $100,000 on the mortgage, and you pay $25,000 in selling costs, your sale proceeds are still $850,000 for downsizer purposes.

Completing the Downsizer Contribution Into Super Form

You must complete the ATO’s Downsizer Contribution Into Super Form (NAT 75073) and provide it to your super fund either before or at the time you make the contribution. You can download this form from the ATO website.

The form asks for details about the property sale, including the contract date, settlement date, sale price, and ownership period. You’ll need to confirm you meet all the eligibility requirements.

Take your time filling it out. Errors or missing information can cause problems with your super fund accepting the contribution.

Submitting the form to your super fund

Send the completed form to your super fund before or when you make the contribution. Different super funds have different submission processes - some accept email, others want it posted, and some have online portals.

If you’re mailing the form, allow extra time for postal delays. You don’t want to miss your 90-day window because the form was sitting in the mail for a week.

Making the actual contribution within 90 days

Transfer the money to your super fund within 90 days of settlement. Most super funds accept electronic transfers, but some have specific processes for large contributions.

When you make the payment, clearly identify it as a downsizer contribution. This ensures your super fund processes it correctly and doesn’t count it against your non-concessional contribution cap.

Keep records of everything - the date you made the transfer, the amount, and confirmation from your bank that the payment went through.

What happens if you miss the deadline

If you miss the 90-day deadline, your contribution won’t be accepted as a downsizer contribution. Depending on your circumstances, your super fund might still be able to accept it as a personal (non-concessional) contribution.

If you’re under 75, the fund could potentially treat it as a normal non-concessional contribution, which would count towards your $120,000 annual cap. If this pushes you over the cap, you’ll have excess contributions and potential tax consequences.

If you’re 75 or older, your super fund can only accept the contribution if you made it within 28 days of the end of the month you turned 75. After that, they can’t accept personal contributions at all. The fund would have to return the money to you.

Extension applications

The ATO can grant extensions to the 90-day deadline in exceptional circumstances. These might include serious illness that prevented you from acting, natural disasters, legal disputes that delayed the sale settlement, or other circumstances beyond your control.

Extensions aren’t automatic. You need to call the ATO on 13 10 20 and explain your situation. They’ll assess your case and decide whether to grant an extension. The earlier you contact them after becoming aware you’ll miss the deadline, the better.

Checking your super fund accepts downsizer contributions

Not all super funds accept downsizer contributions. Most large industry and retail funds do, but it’s not mandatory. Self-managed super funds need to check their trust deed to ensure they’re permitted to accept downsizer contributions.

Contact your super fund before you finalise your property sale to confirm they’ll accept a downsizer contribution. Ask about their specific process, whether they need any additional documentation, and how long the contribution will take to process once they receive it.

Record keeping

Keep copies of everything: the contract of sale, settlement statement, completed downsizer form, proof of payment to your super fund, and confirmation from your super fund that they received and processed the contribution.

The ATO may review your contribution years later, and you’ll need to prove you met all the eligibility requirements. Store these records somewhere safe for at least five years after making the contribution.

Common mistakes to avoid

Learning from others’ mistakes can save you significant stress and potentially thousands of dollars.

Missing the 90-day deadline

This is the most common error. People settle their sale, get busy with moving, and suddenly realise they’re at day 85 with no contribution made yet. By the time they complete the form, submit it to their super fund, and arrange the payment, they’ve run out of time.

Set reminders. Calculate your deadline date the moment you know your settlement date, then work backwards to give yourself buffer time for each step.

Contributing more than sale proceeds

Some couples assume they can each contribute $300,000 regardless of the sale price. If you sell your home for $450,000, you cannot make $600,000 in combined contributions. Your total cannot exceed $450,000.

Calculate this carefully before making any contributions. Once the money is in your super fund as a downsizer contribution, you can’t easily get it back out if you made a mistake.

Not checking the 10-year ownership period

The ownership period is measured from settlement to settlement, not from contract date to contract date. If you bought your home on 5 April 2014 and you’re planning to sell, the settlement of your sale needs to happen on or after 5 April 2024.

Check your purchase settlement statement to verify the exact date you took ownership. Being even one day short means your contribution won’t qualify.

Forgetting to complete the form

You cannot make a valid downsizer contribution without providing your super fund with the completed Downsizer Contribution Into Super Form. If you transfer the money without the form, your super fund might accept it as a regular personal contribution, which could cause problems with your contribution caps.

Complete and submit the form before or at the same time as making the contribution. Don’t assume you can sort out the paperwork later.

Making a second downsizer contribution

The downsizer contribution is a one-time opportunity. If you make a contribution from selling your home in Caroline Springs, you cannot make another downsizer contribution if you later sell a property you inherited or a holiday home you owned.

Be certain about your timing. If you own multiple properties that might qualify, think carefully about which sale will give you the best downsizer contribution opportunity.

Not thinking through Age Pension impacts

Adding $300,000 or $600,000 to your super significantly increases your assessable assets for Age Pension purposes. Some retirees make the contribution without understanding this impact and are shocked when their pension reduces or cuts off entirely.

Model the numbers before committing. A financial adviser can show you exactly how a downsizer contribution will affect your Age Pension entitlements.

Failing to verify fund acceptance

Assuming your super fund will accept a downsizer contribution without checking first can create problems. If you transfer the money and later discover your fund doesn’t accept downsizer contributions, they might return the money or process it as a different contribution type.

Make a phone call to your fund before you do anything else. Confirm they accept downsizer contributions and ask about their specific requirements.

Incorrect ownership assumptions

Some people assume that because they lived in a property for 10 years, they automatically qualify. But if your spouse owned the property for only eight years before you were married, you might not meet the 10-year ownership requirement.

Check the title documents and work out exactly who owned the property and for how long. If there’s any complexity in the ownership history, get advice before assuming you’re eligible.

Planning your downsizing strategy

A well-planned downsizing strategy brings together your property moves, contribution timing, and broader financial goals.

Coordinating property sale and purchase

Some retirees sell first, then rent temporarily while they find their next home. This removes purchase conditions from their sale contract, potentially achieving a better sale price. It also means they have the funds in hand to make their downsizer contribution within the 90-day window.

Others prefer to secure their next property before selling, using a bridging loan or a settlement condition on their sale. This approach provides certainty about where they’re moving but can complicate the timing of the downsizer contribution.

A third approach is to sell and buy simultaneously with aligned settlements. This requires careful coordination and often depends on finding the right property at the right time.

Timing around the financial year

The date you make your downsizer contribution affects which financial year it counts in for super purposes. This matters if you’re also planning to make other contributions or if you’re trying to manage your total super balance for Age Pension or contribution cap purposes.

Making a downsizer contribution in July (early in the financial year) means your total super balance increases immediately, but your eligibility for other contributions in that financial year is based on your balance from the previous 30 June. This can be useful if you’re trying to maximise contributions while staying under certain thresholds.

Making the contribution in June (late in the financial year) delays the increase in your total super balance until the end of that financial year, which might suit your planning better.

Combining downsizer with other contributions

If you’re eligible to make non-concessional contributions and you have the funds available, combining a $300,000 downsizer contribution with up to $360,000 in NCCs (using the bring-forward rule) lets you add $660,000 to super in a short period.

This strategy works best if your total super balance on the previous 30 June was under $1.9 million and you’re under 75 years old. The complexity of combining contribution types makes this an area where financial advice is particularly valuable.

Working with a buyer’s agent

Finding the right downsizer property in your preferred Melbourne western suburb takes time and local knowledge. Many suitable properties sell before they reach the general market, particularly in suburbs where downsizers and young families are competing for limited stock.

A buyer’s agent with expertise in your target area knows which properties are coming to market, understands what represents good value, and can negotiate on your behalf. For downsizers who want to minimise stress and maximise their chances of securing the right property, this expertise can be worth the fee.

Getting financial advice

The interaction between downsizer contributions, other super contributions, Age Pension entitlements, estate planning, and aged care planning is complex. A financial adviser can model different scenarios and help you understand the long-term implications of your choices.

Advice is particularly valuable if you’re making decisions that involve hundreds of thousands of dollars and will affect your income for the rest of your retirement.

Estate planning

Downsizer contributions increase the tax-free component of your super, which can reduce tax when your super passes to adult children. If estate planning is a priority, this benefit might influence how much you contribute and how you structure your super overall.

Think about whether your estate planning documents are up to date, whether your super fund has current binding death benefit nominations, and how a downsizer contribution fits with your broader estate plans.

Using funds for aged care

Some retirees make downsizer contributions knowing they might need to access the funds for aged care in the future. Super can be used to pay refundable accommodation deposits or ongoing aged care fees.

If you’re making a contribution with this potential use in mind, think about how you’ll access the money when needed. You might need to start a pension from your super to create a withdrawal stream, or you might take a lump sum.

How Hidden Gems Property Scouts can help

Downsizing involves two property transactions - selling your current home and finding your next one. Both require local knowledge, market expertise, and skilled negotiation.

Understanding Melbourne’s western suburbs

Hidden Gems Property Scouts knows Melbourne’s western suburbs inside out. We understand which areas attract downsizers, where supply is tight, and which developments or streets offer the best lifestyle outcomes.

Our team can explain the differences between Point Cook and Hoppers Crossing, show you why Sunshine suits some retirees while Caroline Springs appeals to others, and help you think through which location best matches your priorities. We know which pockets of Deer Park have the best community facilities, which parts of Altona offer the most convenient beach access, and where the hidden gems in established western suburbs can be found.

Finding low-maintenance properties that suit your lifestyle

Not all townhouses or villa units are created equal. Some have body corporate issues, others have poor design, and many don’t actually deliver the low-maintenance lifestyle you’re expecting.

We assess properties for the features that matter to downsizers in the western suburbs - single-level living, secure parking, storage space, natural light, outdoor areas that don’t require constant maintenance, and proximity to Sunshine Hospital, Werribee Mercy, or Western Health. Our experience means we can spot potential problems before you buy and identify properties that will genuinely improve your day-to-day life.

Navigating Melbourne’s western property market

The western suburbs market in 2026 offers opportunities, but it also has complexities. Understanding whether a property in Caroline Springs or Tarneit is fairly priced, knowing how to negotiate effectively in areas with different buyer demographics, and identifying which sellers are motivated all require market knowledge.

Our buyer’s agents handle negotiations on your behalf, removing the stress and emotion from the process. We’re acting solely in your interests, with no conflict from also representing sellers.

Off-market opportunities for downsizers

Many of the best downsizer properties in Melbourne’s western suburbs sell before they’re publicly advertised. Sellers with beautifully maintained villa units in Sunshine or well-located townhouses in Hoppers Crossing often prefer discreet sales to avoid disruption.

Hidden Gems Property Scouts has connections across Melbourne’s western suburbs. We know what’s coming to market in Point Cook, who’s thinking about selling in Deer Park, and where opportunities exist in Caroline Springs that you won’t find on realestate.com.au.

Local knowledge of western suburbs amenities

Choosing your next suburb isn’t just about the property - it’s about the lifestyle that suburb offers. We can tell you which western suburbs have active walking groups, which have the best community centres for retirees, where you’ll find excellent GP clinics near Sunshine Hospital, and which communities have strong social networks.

We know that Werribee Plaza offers comprehensive shopping without travelling to the CBD, that Caroline Springs has walking paths perfect for daily exercise, that Altona’s beach is ideal for morning walks, and that Sunshine’s cafe culture has improved dramatically in recent years. This local knowledge comes from years of working in Melbourne’s western suburbs and understanding what makes different areas tick.

Stress-free property search

Downsizing is already a big life change. Adding the stress of property searches, inspections, auctions, and negotiations can be overwhelming.

Our service handles all of this for you. We identify suitable properties across the western suburbs, conduct inspections, provide detailed assessments, and manage the entire purchase process. You make the final decision about which property to buy, but we do the work to present you with the right options.

Supporting both sale and purchase

While buyer’s agents typically focus on the purchase, we understand that downsizers are also selling. We can coordinate with your selling agent, help you understand market timing in your specific western suburb, and ensure your sale and purchase align properly.

This coordination is particularly important when you’re working within the 90-day window for a downsizer contribution. Having someone who understands both transactions and can manage the timing can make the difference between a smooth process and a stressful scramble.

Downsizer contributions offer a genuine opportunity for Melbourne retirees to boost their super while making a lifestyle change that suits this stage of life. The ability to move up to $600,000 for couples from your home sale into super, without counting against contribution caps and without paying contributions tax, is a valuable concession from the government.

Getting it right requires attention to the eligibility rules, careful timing around the 90-day window, and thoughtful planning around Age Pension implications. For many people, the financial benefits combine with the lifestyle advantages of a more manageable home to make downsizing an appealing choice.

Melbourne’s western suburbs in 2026 present opportunities for both sellers and buyers. The combination of affordable property prices, improving infrastructure, and strong community connections makes the west an attractive option for retirees looking to downsize. If you’re thinking about making this move, take time to verify your eligibility, think through the financial implications, and work out which suburb and property type will best suit your next chapter.

Contact Hidden Gems Property Scouts for expert guidance on finding your ideal downsizer property in Melbourne’s western suburbs. Our local knowledge, market expertise, and focus on your interests can help you navigate this transition with confidence, securing a property that supports the retirement lifestyle you’re working towards.

The information provided is for general information purposes only and does not constitute legal, financial, or professional advice. While care has been taken to ensure accuracy, the information may not be complete, current, or applicable to your specific situation. You should always do your own research and, where appropriate, seek advice from a qualified professional before making any decisions based on this information.