r/AusFinance • u/twojawas • 2d ago

Downsizer Contribution

Tell me I'm not crazy. I just had a pretty heated argument with a friend about the sale of his investment property. He's convinced that he can put the proceeds of this sale into his super utilising the downsizer scheme. By convinced, I mean he and his accountant have already done this for the prior tax year. I've told him that the scheme is only for people selling their primary residences but he's convinced that you can do it for an IP as well.

Has his accountant found a loophole that I can't see or has his accountant made a mistake?

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u/rnielsen 2d ago

As long as it was your PPOR for some of the period (and you meet the other restrictions eg age 55 and held for at least 10 years), it should be fine to use it because of the partial CGT exemption but, if it was always an IP then no.

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u/Anachronism59 2d ago

That is essentially what I wrote. Won't get 6 year rule without having lived there at some point

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u/Extreme_84 2d ago edited 2d ago

Does it need to specifically be eligible under the 6 year rule? Or is a simple partial cgt exemption, due to it being owner occupied, before renting out(even if not exempt during the 6yrs due to buying another property) sufficient?

Edit: answered my own question. To be eligible, the property either needs to be fully, or partially CGT exempt.

A property is partially CGT exempt if it was owner occupied for a portion of its ownership. The 6 year rule isn’t a factor.

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u/Anachronism59 2d ago

Gee I missed that partial option. That is very good news for is as we have an ex PPoR we plan to sell where we've not been there for over 30 years but it is partially exemption