Buying extra land and the pension

Q. Vivienne
My husband and I are both on an Age Pension, living in regional Victoria. Our property is 0.84 hectares in Ultima. We are looking at leasing a parcel of land from V-Line, which is 2.25 hectares. There is no power or water on the land. It runs along the railway track and has native vegetation. The reason we are looking at the land is to plant a few more natives to attract the local birdlife. How would it affect our pension if we buy or lease this parcel of land?

A. If you purchase the parcel of land, you will have to report it as an asset to Centrelink and, depending on the value of the property, this may have an effect on your pension payment.

However, if you lease the land, this will not have an impact on your pension, except for the fact that you will see a reduction in your assets to pay for the lease, which depending on your situation, could see your pension increase.

As you are looking to use the land to improve your community, you might want to look at forming a community group for this project.

VicTrack has a series of key criteria for not-for-profit groups looking to apply for a community lease. These requirements will be discussed with you once approval to lease has been provided to VicTrack from the Department of Transport.

There are also various costs associated with buying VicTrack land, such as valuations and transaction fees, that you may not have considered.

VicTrack land sales by law have to be sold on the property’s highest value and best use, which could set you back a lot more than you may expect as they cannot sell for less than valuer-general’s valuation.

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Disclaimer: All content on YourLifeChoices website is of a general nature and has been prepared without taking into account your objectives, financial situation or needs. It has been prepared with due care but no guarantees are provided for the ongoing accuracy or relevance. Before making a decision based on this information, you should consider its appropriateness in regard to your own circumstances. You should seek professional advice from a financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances.

Written by Ben

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