In this article we walk through how to set up a Downsizer Superannuation contribution.
Step 1. Set up the Property downsize
Go to Property and select the existing home from the Dashboard view. Go to the Timing tab and set the Sell Event to the a Property Downsize event. Double click in here to create a new Event if you don't have one already.
The software will sell the property at this event and the proceeds will show in Lets See>Cashflow. If it's linked to any mortgages these will be repaid at this point too, with the net sale proceeds swept into the default cash accounts.
Now, create a new property to buy. To do this go to the Dashboard view > + button bottom right > Property. It is important to mark 'Is this a Future Purchase' as 'Yes'.
Note for non-Primary Residence properties add a Purchase Value. This will be used if the property is sold in the plan for Capital Gains calculations.
The amount entered in market value will escalate by the Inflation Rate until the property is purchased. Once purchased the property will increase in value by the Growth Rate.
Then in the Timing section, select the Downsize event as the 'Buy Event' and Mortality as the 'Sell Event'. The new home will be purchased at the Downsize event and only liquidated at mortality.
Step 2. Set up the Downsizer Contribution into the Super
Go to the + button in Dashboard and select Transfers.
Set up a Transfer from 'All Surplus' to the Super Accumulation phase.
In the Timing tab select the same event as the Downsize.
Step 3. Check in Year View
Finally check it is set up how you would like in Year View.
The spike being the sale proceeds of the first home and the black total need line includes the new purchase and the Super contribution.
Double click on this bar to see the details of the Property liquidation and purchase in Year View - Property tab:
See the Super contribution in that year.
Doing a downsize contribution does not affect the ability to model the Bring forward non-concessional contribution. See this guide for info on modelling that: Superannuation Contributions - Setting up a Transfer to use the Bring Forward Rule