18th Aug 2014
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How much will be exempt?
How much will be exempt?

Graham is considering downsizing, but before he makes any decisions he would like to know how much of the money he makes from selling his house will be exempt under the asset-free period?

Q. Graham

Can you help me with this query regarding Centrelink’s rules? I believe that if I sell my house the money is asset test free for up to 12 months while finding and purchasing another house. If I sold my house and moved into a smaller one, is any leftover money set aside for upgrades to the newly purchased house exempt from the assets test?

A. Provided by Centrelink

Funds resulting from the sale of a pensioner's residence are exempt from the assets test for 12 months after the sale (and in certain circumstances up to 24 months). Note that the funds from the sale are subject to the income test during that period. However, the exemption ends as soon as you move into the house, as the new residence is deemed liveable. Making renovations and improvements for lifestyle reasons would not extend the exemption period.

Centrelink is able to extend the exemption for up to a total of 24 months if the person has experienced delays beyond their control in obtaining a new principal home (e.g. as often occurs when building a new home).

Also note that only the amount that the owner intends to spend on the purchase of the new home is exempt from the assets test.





    COMMENTS

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    Not Senile Yet!
    25th Aug 2014
    6:42pm
    Just another sly way of taxing you (or me) and spending the income on building a New Parliament House, extending MP's discretionary travel budgets and buying 6 Billion worth of New War Toys to assist America patrol the skies up North.
    No wonder they can never Balance the Budget.....they spend it all before they even have it!
    Fready
    25th Aug 2014
    7:22pm
    Someone should mention the fact that sales tax will probably take $50,000 of the proceeds from the amount that Graham would have to purchase his new smaller house. This is what prohibits most seniors from downsizing.
    Pardelope
    27th Aug 2014
    7:10pm
    Perhaps it would be wise to find out if all changes, alterations, and "special needs" items could be included in the "purchase price". Unfortunately, this would probably bump up the amount paid in tax. Remember too, that every state has its own rules, taxes, and (sometimes) incentives which need to be checked out.


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