What are the financial implications of selling my property if I’ve retired?

Answer

If you’re planning to access the age pension you should seek financial advice before you think about selling your home. To qualify for the age pension everything you own will be assessed under the assets test and all the money you earn—including income from money in the bank—will be assessed under the income test. You can find out more from the Department of Human Services.

The home you live in, and up to two hectares around it (if you own land) are not assessable under the assets test or income test. But if you sell your home, the money you receive from the sale will be assessable under the assets test.

Put simply, selling your home can affect the government benefits you may receive. The good news is that for up to 12 months the proceeds from the sale of your home will be exempt from the assets test as long as you’re planning to use the money to buy another home.

But be aware that if you put the money in the bank or invest it elsewhere—even while looking for a new home—you will be deemed to be earning income which will be assessable under the income test from day one. Your pension entitlements could be affected, so make sure you seek financial advice and have a plan for managing your lifestyle expenses and income.

And remember that if you buy a cheaper home, the leftover cash will be counted under the assets test.

You can speak with a financial adviser to make sure you’re maximising your government benefits entitlement and taking advantage of any opportunities you may have to:

  • gift money to a family member (within allowable limits)
  • invest in super and save tax.

 

Home and retirement planner

Thinking about retirement can be both exciting and difficult. Find out what options you have to create a better retirement in three quick steps. 

Get started

Important information

Show more

It’s important to consider your particular circumstances and read the relevant Product Disclosure Statement or Terms and Conditions before deciding what’s right for you. This information hasn’t taken your circumstances into account.

This information is provided by AMP Life Limited. Read our Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relation to products and services provided to you. All information on this website is subject to change without notice.