This year’s Federal Budget focuses on providing relief for those with children, homebuyers and social security recipients whilst maintaining pre-election commitments.
Superannuation changes
- Expanding eligibility to downsizer measures: Legislation has been introduced to reduce the downsizer eligibility age from 60 to 55. This measure will take effect from the first quarter after passing into law, which is expected to be 1 January 2023.
- SMSF and tax residency: The Government confirmed its intention to continue with the 2021/22 Budget measure of extending the temporary trustee absence period from two years to five years and removing the ‘active member’ test. These changes will help SMSFs continue to maintain their Australian tax residency even while members are overseas, and allow them to continue to contribute to their funds even if they become non-tax residents.
- Three-year audit cycle for SMSFs not proceeding: Originally announced as part of the 2018/19 Budget, it was confirmed the current Government will not proceed with this measure.
- Up to $300,000 from the sale proceeds of the family home may be contributed into super
- Contribution does not count towards your non-concessional contribution cap
- No upper age limit
- No work test requirement
Downsizer contribution tips
- Downsizer super contributions must be made within 90 days of settlement.
- If legislated you will need to be age 55 or over at the time of making the contribution.
- If you are currently between ages 55-59 you must wait until the commencement date before making the contribution
- Keep in mind you may not be able to access your downsizer contribution until you reach your preservation age and retire
Talk to us!
If you have any questions, please speak with the team at LA Wealth who can help you to understand how these proposed changes could apply to you.
Disclaimer: Any information provided herein is of a general nature only. No consideration has been taken into your objectives, needs or financial situation. Before acting on this information you should consider if it is appropriate for your situation.