Downsizer Contributions Explained

We all look forward to a comfortable and secure retirement. However, building a financial cushion that will fund our golden years is not easy for everyone. Planning for your retirement begins with thinking about your retirement goals and what you must do to meet them.

In Australia, seniors who want to increase their retirement savings can now make a tax-free contribution to their super using the money from the sale of their main residence. They can do this regardless of caps and restrictions that otherwise apply. Take a look at the potential benefits, eligibility rules, and other things that individuals need to be informed of if they plan to make downsizer contributions.

What are downsizer contributions

If a person aged 65 years and above wants to sell a property that has been their home for at least ten years, they may be eligible to make a contribution of up to $300,000 to a complying superannuation fund using the proceeds of the sale.

An individual can only make downsizing contributions for the sale of their primary residence. The spouse of the individual can also make downsizer contributions to their superannuation from the same proceeds, as long as they are also aged 65 years or older. They can do this even though they are not an official owner of the property.

Downsizer contributions are only feasible where the contract of sale was exchanged on or after 1 July 2018, and must be made within 90 days of receiving the proceeds. Downsizer contribution doesn’t count towards the contribution caps if the individual opens a pension account. However, it can still be made if the individual has a total super balance greater than $1.6 million.

Non-Concessional Contributions vs. Concessional – what’s the difference?

Concessional and Non-Concessional Contributions are payments made to a superannuation fund, however taxed differently. There are also different contribution caps for each type. Concessional Contribution (before tax) are payments made into a fund that has not been taxed yet at their marginal tax rate. Superannuation Guarantee contributions from an employer and salary sacrifice are concessional contributions.

The Non-Concessional Contribution (after tax) is a contribution made where an individual contributes with their after-tax money and offers several benefits like no tax on contribution. The earnings on the investment will be taxed at a maximum rate of 15%. There are many individuals who are on their way to retirement are now trying to get their assets into the super environment as Australia’s super system is very beneficial.

How do downsizer contributions work?

There are a few steps that must be followed to be eligible to make downsizer contributions. Upon the sale of the main residence, a member can contribute to their super fund above their usual concessional and non-concessional contribution caps in the relevant financial year. Upon receiving the downsizer contribution form, the super fund needs to inform the ATO. The ATO will then run verification checks on the amount, and they may also contact the individual for additional information.

The ATO may reject an individual’s downsizer contribution on eligibility grounds. If the downsizer contribution is deemed ineligible, they may be able to accept the amount as a non-concessional contribution if the individual meets the work test and subject to contribution caps.

Benefits of downsizer contributions

Downsizer contributions provide a way to top up your super balance. People aged 65 years and over who do not get the opportunity to save enough funds for their retirement may find that tax-free downsizer contributions provide an excellent opportunity to top up what they have saved to date.

A member who is over 65 years but not 75 years old must have worked at least 40 hours within 30 consecutive days in that financial year, while people aged 75 and over are ineligible to make any voluntary contributions.

Downsizers’ contributions are not subject to the $1.6m total super balance restriction. Because an individual won’t be able to make non-concessional contributions into their super at all, this rule does not apply to downsizer contributions if the total super balance is $1.6 million or above as of June 30 of the previous financial year.

Eligibility (Rules and Regulations)

The first step that an individual must take is to confirm that the amount they wish to contribute will constitute eligible downsizer contributions.

As mentioned, the individual must be 65 years or older at the time of making a downsizer contribution. The proceeds from selling their primary house must have been cleared on or after 01 July 2018. Applicants must have an ownership interest, and the home must have been owned by the same owner for at least ten years. In addition, the home must be eligible for PPR exemption (Principle Place of Residence exemption) and must be in Australia. This doesn’t include caravans, mobile homes, or houseboats.

A downsizer contribution must be made within 90 days of receiving the sale proceeds. They can only transfer a maximum of $1.6 million in super savings into a tax-free pension account. Downsizing the house may impact age pension eligibility.

The costs associated with selling a property and buying another one can be considerable, so they will need to take into account any further property-related costs. Also, downsizer contributions are not tax-deductible.

Part Disposal Rule

In August 2020, the ATO confirmed that a part disposal of a home for downsizer contributions could extend to DomaCom’s Senior Equity Release product. SMSF retirees can now sell a part of their home to top up their super under the Downsizer Contributions legislation. While 5,000 retirees used this facility in the first year, research pointed out that a large proportion of retirees would prefer to access the downsizer provisions but stay in their homes.

Before this ATO confirmation, it was generally considered that an individual had to sell or dispose of their entire interest in their home to be eligible to make a downsizer contribution. However, the ATO confirmation on part disposal now means that SMSF retirees can sell a partial interest in their home and make a downsizer contribution, allowing them to stay in their homes.

The COVID-19 pandemic has put excessive pressure on retirees who see their retirement incomes substantially decrease due to the significant reduction in investment returns. The self-funded retiree cohort has not benefited from many recent government assistance programs, including the JobKeeper and JobSeeker, so allowing them to top up their SMSF using their resources is one measure that can be delivered without impacting the Budget.

For investors, DomaCom’s Senior Equity Release has a 3% income plus capital growth. It may suit SMSF’s in accumulation mode as well as institutions seeking reliable long-term income and growth with no tenancy risk.

How to make a downsizer contribution

A member must complete the Downsizer contribution form to make a downsizer contribution. If the member makes multiple downsizer contributions, he or she must submit a form for each contribution. The total amount of downsizer contributions the member can make is the share of the total proceeds received from the house sale, and up to a maximum of $300,000. The form must be completed within 90 days of receiving the proceeds of the sale.

Download the form and submit it to the super fund on or before the member contribute date (within 90 days). If a member provides false or misleading information on this form, it may result in the ATO imposing an administrative penalty.

Super funds can design their form, which can be made available to members on their website. A member’s tax file number may be required by a super fund to accept the contribution, but it is not a mandated field for the request to be in the approved form. In addition to the form’s required contents, super funds may consider including key messages for members.

If the form was not submitted, the contribution is treated as an after-tax contribution, and a determination is made whether the super trustee can accept the contribution or not. If it cannot be accepted, it will be refunded to the member. If it can be accepted, the contribution is assessed against the non-concessional contribution cap. If the cap was exceeded, significant penalties might apply.

For more information or to access the required form, you can visit the ATO Website.

Seniors and investors can access the SER calculator and get further information via DomaCom’s Senior Equity Release (SER) or by calling 1300 365 930.

Developers Rental Property Accelerator Explained

Rental Property Accelerator is a model like no other, an opportunity for investors and tenants to share in a property and leverage off DomaCom’s unique fractional investment platform, a modern form of syndication where ownership can be shared to present a pathway to ownership for renters and secure tenancy for investors.

Developer Opportunities

For developers the Rental Property Accelerator model can lead to multiple sales to a demographic that is struggling to get into the property market, build confidence and facilitate intergenerational investment opportunities within families.

It is all about creating syndicates by their family and friends or random investors seeking income and capital growth and diversification in the residential sector.

How does Rental Property Accelerator work?

Rental Property Accelerator is based on sharing the developers distribution margin equally between investors and tenants. This is the margin that would have been used to pay sales commission and marketing costs.

Developers can list one or more properties with DomaCom at the full list price to be designated Rental Property Accelerator .

DomaCom will instruct due diligence on the property, review of the contract of sale, independent valuation and property inspection.

DomaCom will arrange debt up to 60% LVR and seek investors for the remaining 40%.

Investment starts at $2,500 and investors can also apply for tenancy through DomaCom’s designated property manager.

On exchange of the contract of sale, the developer rebates the agreed percentage of the sale price which is used to “gift” tenants 5% of the equity in the property with the remainder of the rebate going to the investors giving them a reduced price.

The property is held in a sub-fund of the DomaCom Fund and units are issued to investors at 1 unit per $1.00

Tenants can also acquire units over time by purchasing them from their co-investors via DomaCom’s online secondary market thereby increasing their equity further.

For further information developers should contact

Spiro Skiadopoulos, Third Garden Property – +61 411 443 423

Sal Aljaml, Imperial Wealth P/L – +61 488 996 699

Alternatively you can email DomaCom at

April 2019

News Updates

DomaCom has had a very busy 8 months building on developments set in train months and years earlier and sits on the cusp of some exciting projects and advancements.


  • 62 property deals completed.
  • $50m FUM.
  • Property types include: residential, commercial, rural/farmland, land banking.
  • 1,089 investor accounts.
  • Minimum residential investment $2,500 (other non-residential projects may have higher minimums).
  • Average investment $43,000.

Federal Court case with the ATO

In case you missed it, this was a milestone case in our efforts to enable people to use their superannuation to help address the housing affordability crisis affecting many Australians. DomaCom will continue to work towards resolving the related trust issues raised by the Court to enable more investors to use DomaCom to achieve their housing and investment ambitions.

New research note on DomaCom

Issued by Pitt Street Research (PSR) in mid-April 2019,  the PSR document is a refreshing, succinct review of the DomaCom fractional model well worth a read. View the PSR DomaCom Fractional Investing Report.

Big 4 Bank Pilot

Following a 3-month review process, one of Australia’s Big 4 banks has launched a 6 month pilot for fractional property investment using the DomaCom platform.  If successful this pilot could lead to a commercial deployment within the bank.

Seniors Equity Release

Clearing our final regulatory hurdle, the Seniors Equity Release product is expected to launch late April after a rigorous regulatory approval process with ASIC that has taken 6 ½ years.

The DomaCom model is the first and only investment product in the equity release space and the first new product to be launched in many years. With reverse mortgages (a credit product) in decline since the GFC and now virtually non-existent and no other viable equity release models on offer, there is an enormous need for a new model of equity release and one that is based on equity rather than debt.

For financial advisers

DomaCom is deploying an accreditation program to train licensed financial advisers on this product.  Due to the nature of home equity release, it is essential for seniors to meet with an Australian Financial Services licensed and DomaCom accredited adviser to ensure the product is suitable for them.

Debt Facility Update

residential mortgage concept on the gearwheels, 3D renderingWhilst leverage for property sub-funds was approved 12 months ago by the DomaCom trustee the search for a debt provider has taken longer than anticipated to secure and the recent tightening of bank lending criteria further frustrated our efforts.  We have now launched a debt facility with LaTrobe Financial, a leading non-bank credit provider managing over $13b of retail and institutional investments.

LaTrobe will provide an initial $50m debt facility for any property sub-fund subject to their normal property due diligence.  With an attractive interest rate of 5.99% on a maximum LVR of 60% investors will not need to prove serviceability or show proof of income.

For SMSF Trustees

In the current environment, a debt facility should be of particular interest to SMSFs given all major banks have pulled out of lending.  In the event of a Labour Party win in the Federal election, limited recourse borrowing arrangements (LRBAs) may also be banned ensuring that SMSFs cannot borrow to invest in residential property.

DomaCom debt facility with La Trobe will not hinder borrowing as it is not the SMSF borrowing but the sub-fund that holds the underlying property for the SMSF and other investors.  Income and tax benefits, however, will flow to the investors including any SMSFs.

Strategy tips

  1. Investing With Family & Friends – Fractional investing enables you to invest with family and friends or other like-minded investors easily and in the knowledge that DomaCom’s legal structure ensures your entitlement cannot be compromised. You receive a share of the rental income and capital value of every property you invest in, in proportion to your investment.  DomaCom sub-funds have 3 exit options; at expiry (typically 5 years), using DomaCom’s unique online trading platform and lastly a voting process to wind up and sell the asset.
  2. Minimising Risk in Your SMSF: A property investment via a DomaCom sub-fund enables you to control your asset allocation whilst gaining from a leverage strategy without having to employ a Limited Recourse Borrowing Agreement (LRBA) or set up a Bare Trust. This is a first in SMSF property investment.
  3. Overweight In Property in Your SMSF?: You can set up a campaign retaining a percentage of the property and offer a percentage to other SMSF Trustees or investors. In this way, you can top up your Fund’s cash account without having to sell the whole property. If you have an adviser talk to them about finding other investors who may be looking for allocation to property.
  4. Diversify With Socially Responsible investments – In agriculture, affordable and disability housing, renewable energy and other community/commercial enterprises that interest you and offer a reasonable return. DomaCom undertakes all necessary due diligence on your behalf.

Public Crowdfunding Campaigns

Campaigns on DomaCom may be private or public in nature. Private campaigns are generally those selected by financial advisers who invite clients to invest.  Public campaigns are open to all retail investors.  The following relates to a selection of public campaigns.

NDIS Specialist Disability Housing Fund

Disability Housing Solutions and DomaCom invite Social Impact investors to fund the development of 100 NDIS Special Disability Accommodation (SDA) houses. These are high physical support level houses and apartments to accommodate 400 NDIS SDA tenants currently stuck in hospitals, aged care facilities or at home with aging parents.

Specialist Disability Housing Fund

The gross estimated rental return on these investment properties is 10% pa. This return is based on a combination of NDIS SDA payments, tenants disability pension and Centrelink allowances.  Find out more about the NDIS housing investment.

Multi-Apartment Campaign Fully Tenanted – Target $7.5m For 20 Brand New Apartments

This strategy involves up to 20 apartments already under a tenancy agreement with Quest Hotel Apartments offering an estimated return of 5% p.a. gross rental income and 4% pa growth.

Next Generation Farmers Strategy – Highclere Farm

Highclere is the next property DomaCom is crowdfunding to assist the vendor and a next-generation farmer. An agreed net rental income of 4% p.a. with an estimated 6% p.a. growth is the return that investors may expect.

DomaCom will add further agricultural properties on a similar income and capital growth basis when Highclere is completed.  To join this campaign, click here.

Sapphire Wind Farm Community Co-Investment

Launched by CWP Renewables and Partners Group this is Australia’s first large scale public community investment into a utility-scale wind farm to be located in the New England region of northern NSW.

For further details visit the Sapphire Wind Farm page on our website.

BioSensX medical diagnostic investment opportunity

BioSensX Inc is a Delaware incorporated medical device company that owns the exclusive license to a novel and patent-protected salivary glucose biosensor monitoring system.

Looking to raise AUD$30m from wholesale or sophisticated investors, DomaCom will co-invest up to $5m to enable retail investors to participate as co-investors. Investment is via DomaCom accredited financial advisers. For further information email

New Land Banking in Sydney

Following the successful acquisition of a parcel of land at Badgery’s Creek in Sydney late last year, KSI Investments is seeking investment to acquire another parcel of land in the area with a view to future rezoning. The area is currently semi-rural and the term is 10 years to align as much as possible with the opening of Sydney’s second airport.

Sub-Fund Secondary Sales

DomaCom operates an online liquidity facility where unit holders can offer units for sale in existing sub-funds. Here are some current opportunities:

Sub-Fund APIR codeAddressDescriptionUnit PricePassing Gross YieldGross Yield on Last ValuationUnits on Offer
DMC0144AU‘Doyles’, Lower Coleraine Road, Muntham VIC 3315A 373 acre rural property with cattle yards, subdivided into 11 paddocks of rolling high country fronting Lower Coleraine Road in Victoria’s Western Districts$1.07384.49%3.85%2,412.8611
DMC0006AU806/ 127 Leicester Street, Carlton VIC 3053Modern studio apartment in the heart of Carlton adjacent to Melbourne University’s School of Law. High levels of occupancy year round.$1.06289.30%9.16%26,833.7132
DMC0114AU1/ 388-390 Burwood Highway, Burwood VIC 3125One bedroom apartment used as student accommodation.$1.030010.78%8.97%15,000.0000
DMC0010AU14 Ceres Street, Wulkuraka QLD 4305Dual income property consisting of a one bedroom unit and a 4 bedroom house.$0.88406.06%6.74%48,600.9572
DMC0119AU604/ 127 Leicester Street, Carlton VIC 3053Modern studio apartment in the heart of Carlton, VIC adjacent to Melbourne University’s School of Law. High levels of occupancy year round.$0.97279.10%9.29%10,580.3831
DMC0138AULot 40/ 33 Junction Drive, Redbank Plains QLD 4301An attached residential house with 3 bedrooms and two bathrooms as well as garage for one car.$0.77404.61%5.37%51,412.1255
DMC0137AU117/ 36 Queen Victoria Street, Fremantle WA 6160A 2 bed, 2 bath loft apartment with mezzanine in the redevelopment of the old woollen mill warehouses in Fremantle.$0.79563.34%3.39%127,106.8943
DMC0148AULot 47/ 21 Springfield Parkway, Springfield QLD 4300A 3 bedroom, 2 bath townhouse in Springfield, one of Australia’s fastest growing cities.$0.92044.83%4.99%119,677.7814


General Advice Warning & Disclaimer

June 2018

News Updates


  • 51 property deals completed
  • Property types incl. residential, commercial, renewable energy, farmland, land banking
  • 1,364 investor accounts
  • 863 investors
  • Minimum residential investment $2,500 (some projects may have higher minimums)
  • Average investment $35,000

Continue reading “DomaCom Newsletter – Issue 17”

December 2017

Use crowdfunding to invest in Top Australian Suburbs Residential Strategy

DomaCom provides retail investors, advisers and their clients the edge when it comes to investing in the best residential property in Australia. Blending institutional grade property research with individual property buyer’s agents to select properties for investors, DomaCom put its clients directly in the driver’s seat. DomaCom offers the ability to invest in residential property in the city of your choice through our Top Australian Suburbs Strategy crowdfunding campaigns.
Continue reading “DomaCom Newsletter – Issue 16”

July 2017

July 2017 – DomaCom is pleased to announce that we have commenced the following regional public crowdfunding campaigns that may be of interest to your clients. Akuna, Cobram VIC Akuna is developing a portfolio of resort-style residential communities in regional Victoria for the over 55’s, commencing with a ‘greenfield’ site in Cobram on the Murray River.
Continue reading “DomaCom Newsletter – Issue 15”

December 2016

XMas Seasons Greetings


Seasons Greetings

It is hard to believe that 2016 is coming to an end. The DomaCom Team would like to take this opportunity to thank you for your support, and wish you a wonderful festive season and a prosperous new year. Continue reading “DomaCom Newsletter – Issue 13”

September 2016

Buy the Block

Buy the Block


Channel Nine’s long-running renovation reality series The Block launched on August 22 with the usual fanfare.  DomaCom is taking crowdfunding into reality television in a campaign aimed to help viewers own a slice of one or more of The Block apartments when they go to auction in November 2016. Continue reading “DomaCom Newsletter – Issue 12”