Rules around sharing property

Barrie is buying a unit to share with his daughter and wants to know the pension implications.

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Q. Barrie
My wife and I are considering moving nearer to the city, purchasing a unit with my daughter and we will be tenants in common. We will live in the unit and pay a half a commercial rent to my daughter. This will be our permanent residence until we leave on death or go to an aged care facility.

Will this affect our pension? We are currently on the full pension and this move would use all the funds received from our present residence (which is a villa in a retirement village) and we will need to add an amount from our super fund as the purchase (say 50 per cent of the cost of the new unit) is more expensive than the value of our current residence.

A. I’m a little confused as to why you are paying rent money to your daughter if you own part of the property and are sharing it with her.

Regardless, as long as the property is your primary place of residence and you are selling your current property, the ownership structure should not affect your pension.

Your share of the property will still be exempt from the assets test in this situation.

Before you enter into a financial arrangement such as this, it may pay you to seek advice from a professional financial adviser, who will be able to make sure that the situation is definitely in your best interests.

Do you have a shared property arrangement with your family members? How is the situation working for you?

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Related articles:
https://www.yourlifechoices.com.au/government/centrelink/how-often-is-deeming-applied
https://www.yourlifechoices.com.au/government/centrelink/an-age-pension-for-all-australians
https://www.yourlifechoices.com.au/government/centrelink/implications-of-buying-a-second-house
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 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 Centrelink Financial Information Services officer, 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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