Are you thinking about downsizing? Many Adelaide retirees ask the same question first: “If I downsize, will I lose my pension?” The selling family home age pension rules can feel confusing, but they don’t have to catch you off guard.
The short version
Are you thinking about downsizing? Many Adelaide retirees ask the same question first: “If I downsize, will I lose my pension?” The selling family home age pension rules can feel confusing, but they don’t have to catch you off guard.
In this guide
- Does Selling Your Home Affect Your Age Pension?
- Homeowner vs Non-Homeowner Asset Thresholds
- Case Example: Downsizing in Adelaide
- The Downsizer Super Contribution Link
- Timing the Sale to Protect Your Pension
- FAQ
- Plan Your Downsize With Confidence
Your family home sits outside the Age Pension assets test while you live in it.
Sell it, though, and the sale proceeds can become assessable. This happens unless you understand the exemption rules first.
This guide breaks down the selling family home age pension framework for 2026.
It covers the asset-test exemption, the homeowner vs non-homeowner thresholds, and how a downsizer super contribution fits your plan.
Does Selling Your Home Affect Your Age Pension?
Yes, but not immediately. Centrelink gives you a grace period to sell your old home and settle into a new one.
During this window, the selling family home age pension exemption protects the portion of your sale proceeds earmarked for a new home.
Here’s how the timeline generally works:
| Exemption Period | Length | Condition |
|---|---|---|
| Standard exemption | Up to 12 months from settlement | Automatic once you sell with the intention to buy, build, or renovate |
| Extended exemption | Up to 24 months | Granted if you’re still searching or building |
| Special circumstances extension | Up to 36 months | Requires proof of delays beyond your control (e.g. builder shortages) |
Only the portion of your sale proceeds you genuinely intend to spend on a new home qualifies.
Any leftover cash counts as a financial asset straight away.
Centrelink also deems it to earn income under the income test.
You can confirm the current selling family home age pension rules on the Services Australia real estate assets page.
Homeowner vs Non-Homeowner Asset Thresholds
Your homeownership status changes how much you can hold in other assets before your pension reduces under the selling family home age pension system.
Non-homeowners get a higher threshold, because they still need to cover rent.
The table below shows the current asset limits from 1 July 2026.
| Situation | Full Pension Cut-Off | Part Pension Cut-Off |
|---|---|---|
| Single homeowner | $333,000 | $733,500 |
| Single non-homeowner | $600,000 | $1,000,500 |
| Couple homeowner (combined) | $499,000 | $1,102,500 |
| Couple non-homeowner (combined) | $766,000 | $1,369,500 |
Once you sell your home, you move from the homeowner column to the non-homeowner column until you buy again.
This shift alone can lift or lower your pension, separate from the sale proceeds themselves.
Centrelink reviews these selling family home age pension thresholds every March, July, and September.
Always check the Services Australia assets test page for the latest figures.
Case Example: Downsizing in Adelaide
Consider Ray and Sue, an Adelaide homeowner couple on the Age Pension, working through the selling family home age pension rules firsthand.
They sell their family home for $850,000 and plan to buy a smaller unit for $600,000.
- Centrelink exempts the $600,000 they intend to spend on the new home for up to 12 months.
- The remaining $250,000 counts as a financial asset immediately and gets deemed under the income test.
- Once they settle into the new $600,000 unit, Centrelink reclassifies them as homeowners again. Only the $250,000 surplus remains assessable.
This is exactly the kind of selling family home age pension scenario our Adelaide clients face when they downsize.
The Downsizer Super Contribution Link
Selling the family home opens another opportunity under the selling family home age pension rules: the downsizer contribution to super. You need to be 55 or older.
You also need to have owned your home for at least 10 years. If you meet both conditions, you can contribute up to $300,000 per person into your super fund.
Couples can contribute up to $600,000 combined.
A few points worth knowing:
- You must make the contribution within 90 days of settlement.
- The downsizer contribution doesn’t count towards your normal super contribution caps.
- It still counts towards your total super balance. This can affect your Age Pension assessment, since Centrelink assesses super once you reach Age Pension age.
- You don’t need to buy a smaller home to qualify. You just need to sell an eligible one.
Super counts as an assessable asset once you’re of Age Pension age.
Moving money from a home (exempt) into super (assessable) can genuinely reduce your pension.
This is where the selling family home age pension rules and your super strategy need to work together, not separately.
The ATO’s downsizer contributions page sets out the full eligibility rules.
Timing the Sale to Protect Your Pension
Getting the selling family home age pension outcome right often comes down to timing and sequencing.
Consider these questions before you list your home:
- Do you have a firm purchase plan? An exemption applies more smoothly if you already know your next home and its price.
- Will you have leftover funds? Any surplus above your new home’s cost gets assessed and deemed straight away.
- Are you close to a part-pension threshold? Selling can push you from full pension to part pension, or the reverse, depending on the numbers.
- Could a downsizer contribution help or hurt you? Moving proceeds into super can increase your assessable assets, even though your home was exempt.
- Have you notified Centrelink? Report the sale and your new intentions within 14 days to avoid an overpayment debt later.
Frequently Asked Questions
Plan Your Downsize With Confidence
The selling family home age pension rules exist to protect you during the gap between selling and buying, not to catch you out.
Understand your exemption period first. Then check your new asset thresholds.
Finally, see how a downsizer contribution fits your overall plan before you sign a contract of sale.
Are you weighing up whether to downsize?
Our team at Lincoln Wealth Advisers can model your sale, your purchase, and any downsizer contribution together.
We’ll show you exactly how each move affects your Age Pension.
Speak to our Adelaide retirement planning team before you list your home.
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Ready to find out where you stand?
Book a free, no-obligation appointment with Nasser Zreika to see how this applies to your situation.
General Advice Warning: This article contains general information only and does not take into account your individual objectives, financial situation, or needs. Before making any financial decisions, you should consider whether the information is appropriate to your circumstances and seek personal financial advice. Nasser Zreika and Lincoln Wealth Advisers are Authorised Representatives of Synchron, AFS Licence No. 243313.