Downsizing can offer potential capital gains tax (CGT) benefits in Victoria, designed to encourage older Australians to release equity from their family home. These benefits relate to contributions made to a superannuation fund from the proceeds of the home sale.
As of December 2025, eligible downsizers can contribute up to $300,000 (per person) from the sale of their principal residence into their superannuation fund. This contribution is made *after* tax, meaning it doesn’t qualify for a tax deduction. Importantly, this is *in addition* to any existing concessional or non-concessional contribution caps. To qualify, you generally need to be aged 60 or over at the time of sale, have owned the property for at least 10 years, and the property must have been your principal place of residence for at least five years. In Melbourne’s Eastern Suburbs, where we often see multi-generational families, this can be particularly relevant. Currently in Melbourne, the typical campaign for a downsizing property takes 4-6 weeks, allowing time to prepare the property – styling costs can range from $2,000 to $8,000 – and navigate the sales process. The benefit is not automatic; it requires careful planning and understanding of your individual superannuation circumstances. Changes are planned for 2027 to potentially lower the age threshold, but as of December 2025, the 60-year-old rule applies.
Understanding these benefits requires personalised financial advice, but Fletchers’ long-standing experience in the Melbourne market allows us to help you prepare for a smooth and financially considered downsizing process.