The kids have flown the nest and you’re rattling around in the family home. What do you do with all those spare rooms because you don’t really feel like renting them out on Airbnb. You might even wonder whether you’ve got too much house and not enough super.

Now, you’ve got a chance to change that. Thanks to a government initiative (announced as part of the May 2017 Budget) if you’re 65 or over you can sell your house and put the money into super.

Downsize your house

First up, you don’t actually need to be downsizing because there’s nothing in the rules that says you have to buy a smaller place (the tax office won’t be sending someone out with a tape measure). You can move to the country and buy a bigger place if you want, or even rent for a while.

There are a few boxes you’ll have to tick though before you can take advantage of the scheme.

You need to have been living in your home for at least ten years. You don’t qualify if you’ve been living in a boat, caravan or mobile home either. And your home must be in Australia (so you can’t flog off your condo in Nice and use the proceeds to make a super contribution).

Upsize your super

Most people who are retired and older than 65 aren’t able to put extra funds into super. That’s where this scheme comes in handy. You can put up to $300,000 from the sale of your home into super – if you’re a couple, that’s $600,000 to put into your super tax-free!

Again, there are restrictions. You can’t contribute more than the sale price, or for a couple, their individual share of the sale price.

And in most cases, you’ve got 90 days from settlement to make the contribution.

Careful with your pension

You’ll need to remember that for Age Pension purposes, your home isn’t counted under the assets test. If you sell it and make a downsizer contribution, the amount you pay into super is considered an asset.

That means upsizing your super could reduce, or even cancel your Age Pension. Check with the government’s Financial Information Service before you act.

Honey, I shrunk the house

If you’re retired and thinking about downsizing your house, then there’s plenty to consider – including the best way to look after your money in retirement and whether you want to leave a legacy.

Refer to our factsheet, or the ATO website for further information.