Leveraging Lump‑Sum Super Deposits (e.g., Downsizer, Inheritance) for 30–55 Year‑Olds.
For Australians aged 30 to 55, sudden lump sums—whether from a house sale or inheritance—represent an opportunity to supercharge retirement savings. Rather than leaving these funds in everyday accounts, strategic contributions to super offer unique tax and wealth benefits. Below, we explore two key strategies: downsizer contributions and inheritance recontributions, detailing the rules, benefits, and planning steps for each.
Downsizer Contributions from Home Sales
Selling a long-held family home triggers the downsizer contribution option, a government incentive encouraging older Australians to reinvest equity into super. If you're 55 or older and have owned your home for at least ten years, you may be eligible to contribute up to $300,000 from the sale proceeds into your super. Couples can contribute a combined $600,000.
These contributions are not counted toward your concessional or non-concessional contribution caps, making them an exceptional opportunity to boost retirement savings later in life. However, they do count toward your Transfer Balance Cap, so it’s important to review how this may affect your ability to commence or grow a retirement-phase pension.
To qualify, you must make the contribution within 90 days of settlement and submit the ATO’s Downsizer Contribution Form (NAT 75073) to your super fund. If circumstances prevent meeting the 90-day deadline, you may apply for an extension before it expires.
Inheritance Contributions and Recontribution Strategies
Receiving an inheritance opens another opportunity to enhance your super, although rules are tighter. Once you receive inherited money, you may contribute it as either concessional or non-concessional, depending on your eligibility and available contribution caps.
Concessional contributions are taxed at 15% and include employer, salary sacrifice, and deductible personal contributions.
Non-concessional contributions are made from after-tax income and are subject to the standard annual cap and, if eligible, the bring-forward rule.
An advanced recontribution strategy involves withdrawing money from your super, then recontributing it as a non-concessional contribution. This can reduce the taxable component of your super balance, potentially reducing the tax your beneficiaries pay upon inheritance. It must be executed properly:
The withdrawal must be received outside the super system (i.e., not internally transferred).
The recontribution must occur within contribution cap limits.
The strategy is best suited for those nearing retirement or with significant super balances focused on estate planning efficiency.
Practical Considerations and Compliance Checklist
Whether you're pursuing a downsizer or inheritance strategy, here are key points to manage:
For Downsizer Contributions:
Must be aged 55 or older.
Must have owned the home for at least 10 years.
Contribution must be made within 90 days of settlement.
Submit ATO Form NAT 75073 before or with the contribution.
For Inheritance Contributions or Recontributions:
Confirm your eligibility and current year cap limits.
If using the bring-forward rule, ensure total contributions do not exceed allowable thresholds.
Recontributions must be externally processed and documented.
Always check how contributions will interact with your Total Super Balance and Transfer Balance Cap.
Who Gains the Most?
Australians closer to 55 can access downsizer contributions directly, which is helpful for late-stage retirement planning.
Younger individuals in this age bracket (30s or 40s) can leverage inheritance strategies when eligible, especially if they’re in high-income years and looking to reduce taxable income.
Recontribution strategies are especially beneficial for individuals concerned about estate planning and beneficiary tax outcomes.
Final Thoughts
Both downsizer and inheritance-related strategies provide powerful, ATO-compliant ways to accelerate super growth with lump sums. Downsizer contributions offer a unique chance to shift large amounts into super without affecting regular caps. Meanwhile, inheritance recontributions can convert taxable components into more tax-efficient ones, helping maximise what stays in the family.
Proper documentation, ATO form submissions, and timing are crucial for both strategies. By understanding and applying the rules correctly, Australians aged 30 to 55 can take advantage of these lump-sum opportunities to strengthen long-term retirement and estate outcomes.
Disclaimer: The information provided in this blog is for general informational purposes only and does not constitute financial, tax, or investment advice. We recommend speaking with a qualified financial adviser before making any decisions regarding your superannuation. Every individual’s financial situation is unique, and personalised advice is essential to ensure the best outcome for your specific circumstances.
