The contribution cannot be greater than the person’s share of the sale proceeds, up to $300,000 each. For example, if a couple sell their family home for $500,000; the couples combined contributions cannot exceed $500,000 in total.
The contribution isn’t counted towards a person’s non-concessional cap or subject to the total superannuation balance test, however, it does increase the total superannuation balance, which can limit their ability to contribute in future years.
The total amount a person can transfer to a retirement phase pension is still limited to the transfer balance cap (currently $1.6 million).
The Downsizing Measure may only be used once (i.e. on one home) and despite the name, there’s no requirement to purchase another home nor is there a restriction on purchasing a more expensive home.