My husband, 66, and myself, 65, fully own our home and the adjoining block which we have combined in a way, because the second block has fruit trees, bore water, gazebo, barbeque, clothesline, cubby house, etc.
I will be applying for the Age Pension in February and have asked a real estate agent for a title search as our council has put both blocks on the one rate notice (though both are listed as lots). The title search shows only one block and mentions the parent title. Will Centrelink reduce our pension as we have another title? Can we pay for titles to be combined now and split the titles when selling?
A. For your property to be exempt from the asset test it must be on a single title. If your property only displayed one block when you did a title search you may need to consult a property expert on how this will be assessed by Centrelink.
In limited situations, more than one title can be regarded as exempt curtilage. Land held on separate titles can be treated as if on one title if:
- the principal home is straddled over two blocks
- the blocks, taken together, are protected under law (e.g. indigenous heritage)
- the function of the house as a dwelling-house would be undermined if the other block was alienated. This does not apply if structures such as swimming pools, gardens, tennis courts and garages, etc., are situated on the other block, as these are not considered essential for the house to function as a dwelling.
Where the land was previously held on multiple titles, and these were merged into one title after 9 May 2006, the land may only be able to be exempt if it can be proved that merging the titles improved the person’s capacity to generate an income from the land. The effective land use test is failed if:
- the amalgamation of titles prevented the person from selling land (that was previously on a separate title) to support themselves, or
- the purpose of the titles being merged was to gain access to the exemption.
If you enjoy our content, don’t keep it to yourself. Share our free eNews with your friends and encourage them to sign up.
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.