How will Centrelink value your house block?

aerial view of house block

Vikki lives on six hectares of land and wants to know if it will be considered under the assets test for eligibility for the Age Pension even though she and her husband can’t farm it or sell it off.


Vikki: My husband and I are retired and live in our house on six hectares and have been here for three years. My husband is 72 and I am 68.

We cannot subdivide the land under our local council rules and do not do anything with the land.

Will the extra hectares be considered an asset when applying for the pension? 

Read: Will a year-long trip hit my pension?

A. Well, like many Centrelink rules, it depends, but unfortunately your particular circumstances mean time is not on your side.

According to Services Australia, usually two hectares of land on the same title as your main home are exempt from the assets test and the rest must be declared.

However, if you are a rural customer the land may exempt if you or your husband meet all of the following:

The land use test means you need to use the land to make an income, such as running a farming business, leasing the land, or conversely have little to no scope to earn income from the land.

Read: How does Centrelink assess caravans?

Unfortunately, while you meet most of the criteria, as you have only lived there three years, Centrelink will not accept your claim to exempt the remaining four hectares from the assets test.

Services Australia uses current market value to assess your real estate, which can be as simple as looking at the land value. Although, if there is a big differential between what you paid for the property and the land value it will be based on what you paid for the property.

Services Australia indexes the value of residential properties each year to keep up to date. If it can’t index a property, they will arrange to have it done.

As a federal department, Services Australia uses a different formula to local and state governments if you are wondering why the land is valued differently for taxes and rates.

Have you had land declared exempt? What were the circumstances? We’d love to hear your story in the comments section below.

If you enjoy our content, don’t keep it to yourself. Share our free eNews with your friends and encourage them to sign up.

Written by Jan Fisher

Accomplished journalist, feature writer and sub-editor with impressive knowledge of the retirement landscape, including retirement income, issues that affect Australians planning and living in retirement, and answering YLC members' Age Pension and Centrelink questions. She has also developed a passion for travel and lifestyle writing and is fast becoming a supermarket savings 'guru'.

Leave a Reply

GIPHY App Key not set. Please check settings

Woman with a foggy brain

The hope and hype of psychedelic therapy

chickpea and mixed vegetable curry

Chickpea and Mixed Vegetable Curry