Aussies looking to downsize their property in the new year may be able to benefit from new asset and income tests.
Services Australia said if Aussies sold their principal home, sale proceeds that they intended to use for their new principal home wouldn’t be included in their asset test.
This means if you sell your home for $1 million, but are buying a new one for $700,000, only $300,000 will be included in your asset test. The same rule applies if you use the funds to buy, build, rebuild, repair or renovate your new principal home.
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So, if the same person in the example above were to buy a new home for $700,000 and then renovate it for $100,000, only $200,000 would be included in the asset test.
“For home sales from January 1, 2023, changes to the asset test mean this exemption will apply for a longer period. These changes will also affect your deemed income,” Services Australia said.
“This may help if you want to downsize your home or move into different accommodation. The changes apply to income-support payments, certain allowances, and Low Income Health Care Card holders.”
Services Australia said you would need to inform them within 14 days of selling your home.
Centrelink payment changes on January 1
Around 1 million Aussies on Centrelink will see a major boost to their payments on January 1, 2023.
Those Aussies will see their payments rise by up to $20 a week after the 6 per cent increase hits payments on the first day of the year.
Youth allowance will increase by between $19.10 and $41.40 a fortnight, while people on Austudy will receive between $32.40 and $41.40 more each fortnight.
People on the disability support pension aged under 21 and without children will receive between $27.40 and $40.70 more a fortnight.