Wayne is worried that extra land on his property will rule him out of receiving a part pension and wants information on how his land will be valued.
I am 73 and self-funded, but I am running out of cash and would like to apply for a part Age Pension. My residence of four years is a house on a non-business five hectares, so I have an excess of three hectares of land.
The land is not able to be subdivided (four hectares minimum lot size) with a small 20-metre frontage to the road and no town water. The three hectares is rough and steep country with no agricultural use or income. Can I avoid this assets test? If valuing, can I choose the worst part of land to get the lowest value and not just use a pro rata calculation? Can I use private valuer if it helps my case or must I use the Valuer General?
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A. You will not be able to avoid the assets test.
There are exceptions to the rule regarding land in excess of two hectares (five acres), but one of the key considerations is that you have lived on the property for 20 years or more, which isn’t the case in this situation.
Centrelink uses current market value to assess your real estate, which can actually 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.
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The assessment is done on a pro rata basis, which means you are not able to apportion which part of the land will be assessed for the assets test.
You cannot use a private valuer for this assessment, either.
Valuations are completed by a professionally qualified valuer, who will be appointed by Centrelink.
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Centrelink also indexes the value of residential properties each year to keep them up to date.
If it can’t index a property’s value, it will arrange a valuation when needed.
Have you ever had the value of your property assessed for the purposes of the Age Pension assets test? Was it a simple process?
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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.