What does selling property mean for the pension?

Bob wants to sell an investment property and wonders how his pension will be affected.

What does selling property mean for the pension?

Bob is looking to sell an investment property and wants to know how his pension will be affected.

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Q. Bob
I am 73 years old and own my duplex and also have another one that I rent out. Last year, after all expenses, my net income from my rental property was $9500. I also get a part pension of $760 per fortnight. If I sell my rental property and put the money in a term deposit account will it affect my pension?

A. Without knowing your full circumstances and how much your rental property is worth, it will be difficult to precisely conclude what the effect the sale will have on your pension.

However, your rental property will already be assessed under the assets test, so if you receive the same amount from the sale as the value the property is assessed at, this will not change the overall level of your assets. If you sell the property for more than it has been valued at previously, you may see a reduction in your payments or, if you sell it for less, you may see an increase in your payments.

However, if you do put that money into a deposit account, it will be deemed to be earning a certain amount of interest. This income is then assessed as part of the income test and will ultimately determine whether or not you receive an Age Pension and if you do, how much of an Age Pension you will be paid.

If the deemed income from the amount you have invested is higher than the income you were earning in rent, there may be some effect on the rate of pension that you receive.

You should seek professional advice from a Centrelink Financial Information Services officer to discuss your situation in more detail.

Are you eligible for an Age Pension? Do you know your rights? The PensionChecker™ tool has all the information you need.

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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.





    COMMENTS

    To make a comment, please register or login
    Rae
    29th Apr 2019
    2:02pm
    Yes watch out for Deeming ( dreaming) as they make it up to suit themselves and odd beliefs, thinking and feelings about people.
    GrayComputing
    30th Apr 2019
    5:21am
    NO ASSET TEST FOR A PENSION EVER AGAIN!
    A pension is not welfare.

    Now is the season for discontent, so do something about it!
    It is time to kill off this insane hugely expensive pensioner whacking bureaucracy.

    It is time for all of us (yes that means you) to rant at our MPs and Senators daily to take action for human decency and a huge stress reduction for pensioners

    NO ASSET TEST FOR A PENSION EVER AGAIN!
    A pension is not welfare.

    Most economist say we will save taxpayers money by dropping asset testing because of the massive overheads cost in running Centrelink and the 10,000 conflicting rules.

    Hiring more Centrelink staff will only increase taxpayer’s costs for processing the creeping insane red tape monster system politicians and well paid bureaucrats have created.

    Help scrap it now. Become a hero.

    Even poorer New Zealand has a NO ASSET pension so it is cheaper and user friendly.

    Why worry that few million$ earners get it too. That is peanuts to them, not enough for a good vintage champagne.

    Do retired and retiring people really look forward and want 100++ visits to/from Centrelink and be part of 3 million waiting queues and lost calls?

    We all (that means you) need to tell our MP and senators every day that these criminal asset tests for a pension must be dropped now.
    Cowboy Jim
    30th Apr 2019
    9:06am
    We all agree with you, my MP knows about my feelings but I do not think she worries about it one bit. Labor and LNP will keep the asset test and inheritance tax is sure to come in possibly sooner than later. Only voting because it's compulsory.
    Karl Marx
    30th Apr 2019
    10:04am
    Jim, there will be no death or inheritance tax by the ALP. They categorically deny any introduction now or in the future
    However, the LNP are silent about it
    ardnher
    30th Apr 2019
    9:09am
    should be treated the same as someone with a term deposit...it is an asset!
    tams
    15th May 2019
    9:32am
    ""You should seek professional advice from a Centrelink Financial Information Services officer to discuss your situation in more detail."

    FIS Officers cannot provide advice - only information
    tams
    15th May 2019
    9:32am
    ""You should seek professional advice from a Centrelink Financial Information Services officer to discuss your situation in more detail."

    FIS Officers cannot provide advice - only information
    micky d.
    21st May 2019
    5:04pm
    Don't forget to factor in your (possible) CGT (Capital Gains Tax).
    Formula used to be;
    Profit on Sale (Purchase Price v Sale Price)
    Consider only 50% of that Profit as Taxable and CGT that half by 12%.
    That formula might well have changed in recent times but the CGT can bite quite deeply into your remaining funds for investment.


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