1.1.C.207 Commercial lease value
This definition applies to all payments.
Definition: Commercial lease value for non-farming properties
The commercial lease value of an asset is the value that can reasonably be obtained by using the asset. Generally this is the asset's market RENTAL value.
If a person's asset does not have a commercial lease value THEN notional income CANNOT be assessed.
Explanation: The ZERO commercial lease value is taken to be a value of LESS than 2.5% of the asset's value.
Example: The following assets have no commercial lease value:
- most types of livestock, or
- private company shares that CANNOT be sold, or
- loans that CANNOT be repaid, or
- a life insurance policy's surrender value.
Definition: Commercial lease value for farming properties
The commercial lease value for a person's farming property is ALWAYS assessed by a professionally qualified valuer appointed by Centrelink. Delegates MUST tell the person how the valuation was calculated. A delegate MAY request a reassessment if the valuation does not SUFFICIENTLY take into account the:
- inherent characteristics of the land (see example 1), OR
- demand for the land, OR
- general farm incomes, OR
- legal impediments to commercial use (see example 2), OR
- expenses incurred if the farm is leased (see example 3), OR
- value of water licences, if relevant, OR
- value of tobacco quotas, if relevant.
Example 1: Soil conditions, erosion, salinity, and condition of fencing.
Example 2: An existing lease.
Example 3: Rates, insurance and interest.
Policy reference: SS Guide 126.96.36.199 Notional Ordinary Income - Overview, 188.8.131.52 Notional Ordinary Income - Person's Farm Used by a Family Member, 184.108.40.206 Notional Ordinary Income - Other Farming Situations