Q&A: Is my home counted as an asset?
Hi, it’s Greg from Retirement Essentials, your helping hand when applying for the age pension. Generally speaking your home is exempt from the assets test. There are some exceptions for example if you have a very large or income producing property. If you are travelling and your home is not occupied it will continue to be assessed as your home for a period of up to twelve months, but you need to let centrelink know. If you are renting out your house it will be treated as an investment property. Please leave all questions in the “Comments” section.
does superannuation affect your amount of pension you get ,and do shares affect your pension amount fee brunjes
Hi Fred
Super and shares are all counted as assets and are definitely included when Centrelink calculates your eligibility for the Age Pension.
My husband and I are separated (not divorced). He lives in the family home and I live in our second home that was previously an investment property earning income. Both houses are in joint names. Will the house I’m living in be considered an investment?
Hi Debbie
We don’t believe that the house you are living in would be considered an investment property due to the circumstances you outlined. You will need to notify Centrelink of your separation, that the house that was once an investment property is now your principle place of residence. This evidence should then result in you being assessed as a homeowner for Centrelink age pension purposes if you meet the age pension eligibility requirements.
Hope this is of assistance.
We own an investment property which is worth approximately $530,000 for which we receive $350 per week in rent, my wife turns 67 in January 2024, I don’t turn 67 until 2025. We have about $190,000 in the bank earning interest we also moved into a retirement village over 22 months ago after selling our family home. I have a small business for which I gross about $1,400 per week. In your opinion are we entitled to either a full or part pension and if not what steps can we take to secure the age pension, either full or part?
Thanks in advance.
Hi Ron, it’s Sharon here, great question. One partner is able to qualify for Age Pension without waiting for the other to reach Age Pension age, provided combined assets and income are beneath the current thresholds. It isn’t clear whether your investment property has a loan against it, and there are a small number of expenses which Centrelink will allow to be offset to reduce your assessable rental income, such as rates and investment loan interest charges. Your money in the bank is Deemed for the Income Test assessment, in addition to assessable rental income. It is possible to have a small business and still qualify for Age Pension, however some additional information would need to be provided, as business expenses can be taken into account to assess your employment income which is used for the Income Test. It is possible to secure some Age Pension if your assets and income are beneath the thresholds for the Assets Test and Income Test. I would be happy to walk you through strategy options to maximise your entitlements in one of our Strategy Consultations. These can be booked here if you are interested.
I own an investment property and have built a granny flat on the back of the property. The main house is rented out and I’m now retired and living in the granny flat. I have been told the entire property is assessed as an investment property even though I’m living in the granny flat. If this is the case then is it correct that I would be assessed for the pension as a non-homeowner?
Hi Cilla. Your situation is a little more complex than normal and we aren’t aware of all the facts in your circumstance. Typically someone in this situation would be assessed as a homeowner as their name is on the title and there is only the one title covering the house and granny flat. The property would be their home not an investment. The person would also have to declare the rental arrangement via a form of rental certificate.
Hi James, I own and live in a duplex. My x husband lives in the other one rent free. The duplex is on one title. WILL Centrelink view this as an investment? I am 67 and considering retirement, have $530000 in super.
My x is on a disability pension and has lived there for years, he stoped paying me rent a few years ago when the mortgage was paid out. I also get a careers allowance for him.
Will I be able to get a part pension?
Hi Joy,
This should not count as an asset as there is only one title document and you are not receiving rental income.
You may need to complete a “Separated under one roof form” with you and your ex husband as you share a property but can show on this the separate living quarters, etc.
We are considering having a new house built on a block of land we own. We cannot get a bridging loan so we will need to sell our existing house to pay for it and will live on site whilst it is being built. The problem is that once we have sold our current home and have the capital in the bank, it will be included in our assets and will wipe out our partial age pension.
Could we set up some sort of trust account with the builder for the full cost of the new house and then draw down the staged payments as the build progresses? If not, what other options are there?
Hi Lynne, thank you for reaching out for assistance. The good news is that Centrelink do appreciate situations such as yours and actually give you a 12 month exemption whereby the amount of capital from the sale of your former home, which you intend to spend on building the new home, will not be counted as an asset. You may still see a change to your pension if you are being assessed based on your income rather then assets. Although the amount is exempt from your assets it is still deemed to earn income thus your total income earnings will increase which could cause a reduction in your pension.
We are thinking of building a granny flat on the top floor of our exiting primary residence. Our name is on the title and the flat won’t be rented out. Does this impact our ability to qualify for the aged pension?
Hi John, great question! As the house you live in is exempt from the assets test, you can increase it’s value without impacting your Age Pension eligibility. If you were to start renting any part of your house out, either the granny flat or main house, then you would need to declare the details to Centrelink and the income may impact your Age Pension.
Hi Steve, I am building a new home which will have a self contained studio built in at the front of the residence. This will all be contained under the main roof and will not be a free standing “granny flat”. I have now reached retirement age and will at sometime qualify for a part pension. I understand that when I rent this self contained studio I will have to declare rent paid to Centrelink as income. My question is will that portion of my principle place of residence be classified as an asset.
Regards Stewart
Hi Stewart, great question, these situations can be tricky! The portion of your primary residence that is rented out would NOT be considered an asset. There are some scenarios where a portion of a private residence can be considered an asset so it is good that you are mindful but in this scenario it does not impact you.
Hi Steve, I have build a granny flat in my backyard it cost me around 160k to build,and i am renting it out at the moment but later on my family member (son) will be shifting into it
My question is this granny flat is a asset? and how much will be the value conceederd by center link while i am renting this ? is it 160 k or more .
and will it be still asset if we are not renting it out .
Thank you
Regards Jagdish
Hi Jagdish, thanks for seeking clarity! Presuming the granny flat is on the same title as your primary residence (as in you could not sell one without the other) then the granny flat is not considered an asset. The rental income you receive does need to be declared to Centrelink and will likely impact the amount of pension you receive but the cost/value of the granny flat will not.
i am wanting to buy a duplex. I am retired. I will be living in both residences as i need one place for when family comes to visit. Will this be counted as an asset in determining age pension?
Hi Geoff. It depends!! Some factors to consider include whether the duplex is on one or separate titles. If on separate titles then one will be considered your home and the other an investment asset.
I’m paying 80,000 dollars in buying a residence in Canberra. My son is paying the balance. It will be a family trust. My son will live in the home, and it will be his primary place of residence. My share in the home will be my secondary place of residence. NOW THE QUESTION, will it be a deemed asset, or not.
Hi Thomas, thank you for reaching out! There are a couple of factors that will be taken into consideration but it is likely you will be considered a part owner and it counts as an investment property. To discuss it in full detail and understand your options it would be best to book a general advice consultation. The consultation can be either online or via phone call, goes for up to 45 minutes and costs $150. CLICK HERE to book now.
No portion of the house will be rented out It will be my sons principle place of residence. My portion will simply be my secondary place of residence. It should be exempt from deeming.
Hi Thomas and thank you for replying back! Even if you are not earning rent off it, any property that you have ownership of (even if only a small %) which is not your primary residence is classed as an investment property and considered an asset of yours. Again I recommend you book a consultation to discuss it in detail and understand how it will impact you specifically.
I’ve been an Australian pensioner for over 3 years and have not received a payment from Centrelink for the last 4 months. Apparently the retirement social security I receive from the U.S.A. plus my wife’s income puts me over the asset/income limit. I’ve started investigating Centrelink policy regarding foreign income. I am currently contesting their assessment of the foreign income amount. I’m an Australian U.S.A. expat receiving U.S.A. retirement social security. I’ve learnt that Centrelink uses the ‘gross’ (before tax) US$ as the income received. I’ve lodged a review arguing that it should not use the gross amount but the net amount that goes into my bank account, as it’s regarded not as pension but income. I’ve argued that in the way they assess any other form of foreign income, eg. overseas rental income, share dividends from a foreign market, sale of foreign property… etc. They should only recognise the amount received. U.S.A. tax is deducted from my social security payment prior to overseas transmission and yet Centrelink assess based on the gross amount before tax? I’m currently waiting on the results of a Centrelink review. I’ve cited The U.S.A. / Australian Tax Treaty as some form of reference in as much as it has no reference to how U.S.A. Social Security Should be treated and what Centrelink uses as the basis for their inclusion of the before tax payment amount. If you have any knowledge in this area then please enlighten the readers. It’s very grey area!
When My father passed away he left his share of two houses to my mother and my brother, ie each have a 50% share in both houses. They live in one on weekdays and in the other on the weekend. My mother is now looking at applying for the pension and is concerned that her share of the week-end house would not be considered as primary residence and therefore considered an ‘income’ asset even though there is no rental income. As such this may exclude her from getting the pension. The houses have been in the family for more than 20 years. How does Centrelink consider partial ownership like this situation?
Hi Mike, thank you for sharing your situation. As with most things relating to Centrelink there are a few ifs, buts and maybes to consider. It would be best to discuss the situation more formally via one of our consultations. CLICK HERE to learn more.
If my mum and I buy a house together (50/50 ownership) and she lives there with me, would this be considered her primary residence for the pension?
Hi Sophie, thanks for reaching out and well done teaming up with mum! Yes, in this instance your mother would be assessed as a homeowner and the house you and her live in would be considered her primary residence.
Hi, I have a smsf already setup, I’ve just turned 60 and are retiring soon.
When I change my fund to a pension phase(allocated pension),
Will the investment property be included in the assets to work out the 4% minimum for the allocated pension payment.
If so, how is that worked out.
I also have shares and cash which obviously is included in the asset calculation, but not sure about the investment property.
Thanks Col
Hi Colin, thanks for reaching out for further clarity. We would be happy to have a chat with you and help you understand how SMSFs are assessed and what the pros/cons are of each of your options. Please CLICK HERE to book one of our Understanding More About Super consultations where our advisers can provide the guidance and support you are seeking.
Hi, my parents have a large house which is their primary residence. They are thinking of dividing it up so that they can live in a portion and rent out a portion. It will remain on one title. Will the house be classed as a primary residence or will the part they rent out be considered an asset?
Hi Freya, generally speaking the house would still be exempt from assessment as it remains their primary residence but the income they start receive will be assessable.