Unlocking Supply of Family Homes Bill 2025: how expanding downsizer super contributions would work

The short answer

Unlocking Supply of Family Homes Bill 2025: how expanding downsizer super contributions would work

The Unlocking Supply of Family Homes Bill 2025 is a private senator's bill introduced by Senator Jane Hume that proposes three changes to the downsizer contribution scheme under the Income Tax Assessment Act 1997: lowering the minimum age from 55 to 50, extending the contribution window from 90 days to one year after settlement, and increasing the maximum contribution from $300,000 to $500,000 per person. The bill is currently before the Senate and has passed the first reading and second reading moved stages. If enacted, it would allow Australians aged 50 and over to contribute up to $500,000 from the sale of their family home into superannuation, with a full year to make the contribution after the sale settles.

This is a federal system guide. State constitutions, parliaments and local-government laws can allocate comparable functions differently.

The useful question is not only “what is the rule?” but also “who administers it, which document controls it, and when might it change?” That distinction prevents an accurate general explanation from becoming wrong advice in a particular election, chamber or policy setting.

Evidence review

What the bill proposes to change

The bill amends the Income Tax Assessment Act 1997 in three specific ways. First, it lowers the minimum age of eligibility for a downsizer contribution from 55 years to 50 years. Currently, only Australians aged 55 and over can make a downsizer contribution — a special type of superannuation contribution made with proceeds from selling the family home. The bill would extend eligibility to those aged 50 and above.

Second, the bill extends the time window for making the contribution from 90 days to one year after the change of ownership occurs. Under current law, sellers have only three months from settlement to get the funds into their super fund, which Senator Hume argues is insufficient for many older Australians navigating the sale process, particularly if they are simultaneously purchasing a new home.

Third, the maximum contribution amount is increased from $300,000 to $500,000 per person. For a couple selling jointly and both making the maximum contribution, this could mean up to $1,000,000 being transferred into superannuation from a single home sale — a substantial increase from the current maximum of $600,000 for a couple.

The bill does not change other eligibility requirements for the downsizer scheme: the home must still have been owned for at least 10 years, the contribution can only be made once in a lifetime, and the proceeds must come from the sale of the family home.

Evidence review

How the downsizer contribution scheme works now

The downsizer contribution scheme, introduced in 2018, allows older Australians to contribute proceeds from selling their family home into superannuation without those contributions counting towards the usual concessional or non-concessional contribution caps.

To qualify currently, an individual must be 55 years or older, the home must have been owned for at least 10 years, and the contribution must be made within 90 days of settlement. The contribution is capped at $300,000 per person and can only be made once in a lifetime.

The scheme was designed to encourage older Australians to sell larger family homes that may no longer suit their needs, freeing up housing stock for younger families while simultaneously boosting retirement savings. It was introduced as part of the 2017-18 Federal Budget and has bipartisan support as a policy mechanism.

Unlike most superannuation contributions, downsizer contributions are not subject to the usual age limits, work tests, or contribution caps. This makes them particularly valuable for retirees who may not otherwise be able to add to their superannuation balances.

Evidence review

Who would be affected

The primary beneficiaries of the bill would be Australians aged 50 to 54, who would gain access to the downsizer scheme for the first time. This age cohort — numbering hundreds of thousands of homeowners — could use the scheme to boost their superannuation balances at an earlier stage of their working lives, when they may still have years of employment and additional contributions ahead.

Existing eligible downsizers aged 55 and over would benefit from the extended contribution window (one year instead of 90 days) and the higher cap ($500,000 instead of $300,000). The extended window in particular addresses a practical concern: many home sales involve delays, and the current 90-day window can be challenging for sellers who are also buying a new property.

The bill could also affect the housing market by potentially encouraging more property listings from homeowners who might otherwise delay selling. An increase in the supply of established housing stock, particularly larger family homes in established suburbs, could modestly improve housing affordability.

Real estate agents, conveyancers, and financial advisers would also be indirectly affected as transaction volumes and advisory needs shift. Financial advisers in particular would need to update their advice strategies to account for the expanded downsizer scheme.

Evidence review

The policy argument: housing supply and retirement income

Senator Hume has framed the bill as a dual-purpose measure addressing both housing affordability and retirement income adequacy. By lowering the eligibility age, the argument is that more homeowners would be incentivised to sell large family homes, increasing the supply of established housing stock.

By extending the contribution window and raising the cap, the bill aims to make the scheme more practical and attractive. The current 90-day window can be a barrier to participation, and the $300,000 cap may not represent a meaningful proportion of the sale proceeds for homeowners in high-value markets such as Sydney and Melbourne.

The bill's title — 'Unlocking Supply of Family Homes' — signals its primary policy objective is increasing housing supply. This framing is politically significant because it links superannuation policy to housing affordability, two of the most prominent economic issues in Australian public debate.

Critics may question whether the measure would meaningfully increase housing turnover or primarily function as a retirement savings concession for asset-rich older Australians. The cost to revenue of expanding the downsizer scheme would need to be set out in the Explanatory Memorandum.

Evidence review

Where the bill stands in Parliament

The bill was introduced in the Senate on 26 November 2025 and read a first time on the same day. The second reading was also moved on 26 November 2025 by Senator Hume. As at 17 July 2026, the bill remains 'Before Senate' — it has not yet proceeded to a second reading debate.

As a private senator's bill originating in the Senate, it faces two significant hurdles: it must pass the Senate and then the House of Representatives. Private members' and senators' bills have a lower passage rate than government bills, though they can succeed with sufficient cross-party support.

No proposed amendments have been circulated, and no committee referral has been noted on the bill's progress page. The bill would need to be debated and voted on before the 48th Parliament concludes, or it would lapse.

Senator Hume, a Liberal Senator for Victoria, has significant credibility on economic policy as a former shadow minister and the party's finance spokesperson. Her sponsorship of the bill gives it a higher profile than many private senators' bills, but it still requires government or crossbench support to pass.

Evidence review

How it compares to other superannuation housing proposals

The bill sits within a broader policy debate about using superannuation to address housing challenges. Other proposals floated in recent years have included allowing first-home buyers to access superannuation for deposits (the Coalition's Super Home Buyer Scheme proposal) and expanding the First Home Super Saver Scheme.

Senator Hume's bill takes a different approach — it focuses on the supply side by incentivising older homeowners to sell, rather than helping younger buyers to purchase. This supply-side framing distinguishes it from the more politically contentious proposals to allow early access to superannuation for housing.

Unlike proposals to withdraw super for housing, downsizer contributions keep the funds preserved within the superannuation system until the contributor meets a condition of release. This means the retirement income objective is maintained alongside the housing supply objective.

The bill is consistent with the Coalition's broader policy approach of using superannuation incentives to address housing affordability, as opposed to direct government spending or regulatory interventions in the housing market.

Common questions

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