A reader is planning to move to a more regional area in the next two years. She knows she will not meet the exemption criteria for land, but wants to know how her ‘extra’ land will be assessed.
•••
Q. Sally
I receive a disability allowance from Centrelink and will be of Age Pension age in July 2025. I would like to sell my home and move to a rural area on small acreage. I understand I’m allowed two hectares without my benefit being affected, but can you tell me how much I would lose if I bought three or four hectares? How is it calculated? I would not be using the land to make a profit, just to keep my two horses.
A. Sally is right, her extra land will not be exempt under Centrelink rules.
If you’re a rural customer, all the land on a title may be exempt if you or your partner meet all of the following:
- have reached Age Pension age
- are getting Age Pension, Carer Payment or Pension Bonus Bereavement Payment or a service pension from the Department of Veterans’ Affairs
- have lived there for the past 20 years in a row
- pass the land use test.
So, she will not be exempt as she is buying new property and will have lived there for less than 20 years.
As readers probably know, Centrelink uses two tests to evaluate your eligibility for the Age Pension, the assets test and the income test.
Under the assets test, for rural or regional properties, your principal home and up to two hectares of land won’t be included in the assets test.
So although Sally has no intention of making an income on her ‘excess’ land, it will still be included in the assets test.
How will it be valued as an asset?
You can provide evidence to Centrelink on how much you paid for the property, the value of the house and first two hectares of land and the value of the rest of the land.
You can do this using current market sales and unless it’s wildly unreasonable, Centrelink will usually accept this value.
Your real estate agent should be able to help you out or you can hire a professional valuer.
However, it’s worth noting Centrelink uses current market value to assess properties, which is different from how councils and state governments value real estate.
Councils often include other taxes in rate notices including fire and ambulance services and water supply payments. This is why your council valuation will be different from your Centrelink valuation.
So don’t use your council land valuation as a guide.
If Centrelink doesn’t agree with your valuation, it usually uses third-party valuers to provide indexed real estate market data by postcode.
Contesting a valuation
If you disagree with the valuation Centrelink provides, you can contact Centrelink, which should provide an onsite, third-party valuation. This service is free.
There is more information about contesting a decision here.
You can also hire a private land valuer to provide a report if you wish to contest a valuation.
Many companies have specialist services to value land for Centrelink purposes. You can find them online.
They may help support your claim by providing a more accurate valuation of the land due to their local and professional knowledge.
For example, a Centrelink evaluation assesses your land using sales data for similar properties in the area.
An expert could report that as part of the land is a flood plain it is not suitable to be built on or subdivided and worth less than the surrounding properties.
If Sally is considering a move, it’s probably worth having the home and surrounding two hectares valued separately from the entire property to know where she stands with Centrelink before she buys.
A single homeowner can have up to $301,750 in assets before their Age Pension is affected.
Have you ever contested a Centrelink ruling on a valuation? Were you successful? Why not share your experience in the comments section below?
Also read: How will Centrelink assess my furniture?
