Can we downsize into a more expensive home and still add to super?

Given my wife and I are over 75, the only way of putting more money into super is the downsizer contribution. If we buy a slightly more expensive property than our current home, can we still do a downsizer contribution if we have the cash to do it?

I’ve had to pull out the reference guides and do a bit of reading on this one.

There are various eligibility criteria when making a downsizer contribution, most notably that the property being sold was your main residence for ten years or more before the sale occurring, that the super contribution happens within 90 days of the change in ownership, and that the contribution can’t exceed the value of the property sold.

There are a raft of conditions to consider when making a downsizer contribution that you need to keep in mind.Credit: Simon Letch

I can see nothing, however, that stipulates that the new property purchased must be of a lower value than the one just sold. Perhaps check with your super fund prior to making the contribution, but it seems to me you’ve identified a handy loophole here.

I am nearly 60. Currently, I have a full-time job, three part-time sessional/casual jobs and a part-time consulting gig.

Whilst I don’t plan to retire for at least a few years, when I turn 60, I am wondering if I should end one or two of the sessional roles (which I have been planning to do anyway), flip my current super balance into pension mode, and restart an accumulation plan for subsequent contributions. I could re-contribute the 4 per cent minimum draw as a mix of concessional and non-concessional back to the accumulation plan.

It sounds like you are very busy! Certainly, there is no problem running both a superannuation pension account and an accumulation account concurrently. And as you point out, if the minimum pension drawings paid out to you were not needed, you could re-contribute these back into the accumulation account provided they were within the contribution caps.

Once you turn 60 you could commence a transition to retirement pension (TTR) to achieve your aim here. Note, however, that these pensions have their earnings taxed identically to accumulation funds, so the benefit might not be as great as you expect. If the TTR enables you to make extra tax-deductible contributions, then you may come out in front.

I have access to $140,000 that I do not need to invest at this time, but do not want to give away. I would like to help our children with their mortgage whilst interest rates are high. Is there a way that I could set up an offset account for each child against their home loan, but we have ownership of the account as we will draw on this money in the future?

To my knowledge, an offset account needs to have identical ownership to the loan with which it is attached. I can’t think of a way to give you transactional access to these funds whilst simultaneously having the balance offset your children’s mortgage.

You could lend these funds to your children, ensuring there is documentation to make it clear that the money is not a gift. Within this documentation, you could make clear that the funds are to be returned to you at some point in the future.

Ideally, you would have a lawyer assist you with this paperwork. However, it could be that the costs associated might outweigh the benefits here. You certainly need to protect yourself, particularly in the instance of a marriage breakdown for one of your children.

Paul Benson is a Certified Financial Planner at Guidance Financial Services. Questions to: [e-mail]

• Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

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