SALE OF A HOUSE OWNED FOR 10 YEARS OR MORE
With tax benefits possible but there is a deadline of 90 days
A house built and owned more than 10 years ago which was lived in for a short period of time was converted to a holiday house with rent about 2 weeks per year.
Despite the interesting history of the house, the sale proceeds were able to be used for a $300,000 per person Downsizer contribution to superannuation. The deadline for this option was 90 days from settlement. An extension was requested from the Australian Taxation Office, and slightly more than a one-year extension was granted! Even one year is a short time to understand and act on the benefits of the DOWNSIZER CONTRIBUTION TO SUPERANNUATION. Often it is a difficult time for people to appreciate in that year the advantages of this by the time they settle, move house, cope with COVID and consider what to do with the funds received. Should the deadline be missed, an extension should be requested with the Australian Taxation Office. This information should then be passed onto the superannuation fund which is due to receive the funds.
There are now additional options for increased contributions to superannuation once you are over 60 years of age. These should be researched and advised for maximum use of the tax-free retirement pension once funds are in superannuation.
A coupled of the tax benefits available are:
1. An apportionment of the Capital Gains tax based on the time the house was used as a home.
2. The NIL need for taxable income from work to contribute funds to superannuation.
3. No payment of the 15% superannuation contributions tax.
4. The tax-free status of a pension started from the funds contributed to superannuation such as via the Downsizer Contribution But Matching The ATO Deadline.
SEEK OUR ADVICE ON THIS SCENARIO AS IT CAN BE TRICKY