18.104.22.168 General Provisions for Assessing the Principal Home
This topic discusses:
- the principal home as an exempt asset (1.1.E.170),
- the effect of an income support recipient operating a business from home on exemption,
- when the proceeds from selling the principal home are exempt, and
- when principal home insurance or compensation payments are exempt.
The principal home is defined in 22.214.171.124.
Act reference: SSAct section 11A(1) Principal home
The principal home is an exempt asset
The income support recipient's principal home, including adjacent land (1.1.A.58), is an exempt asset no matter what its value. Even when an income support recipient is NOT living in their principal home, it MAY be exempt for one or more years depending on the reason for vacating the home.
An income support recipient's land adjacent to the principal home may be exempt under the private land use test, and from 1 January 2007, under the extended land use test, for age pensioners and CP recipients of age pension age.
Act reference: SSAct section 11A(1)(a) If a principal home is a dwelling-house-the land adjacent…, section 11A(3) Private land use test, section 11A(6) Extended land use test, section 1118(1) Certain assets to be disregarded in calculating the value of a person's assets
Policy reference: SS Guide 126.96.36.199 Defining the Principal Home, 188.8.131.52 Exempting the Principal Home - Temporary Vacation of Property, 184.108.40.206 Exempting the principal home - care situations, 220.127.116.11 Defining Land Adjacent to the Principal Home
Operating a business from their principal home
Where an income support recipient operates a business from their home, each case needs to be considered individually to decide whether the whole home property continues to be exempt. If part of the property is used for both business and domestic purposes, then this part of the property is part of the principal home and IS exempt.
Example: If there is a specific room in the house that is used for the business but is also used for domestic purposes, this particular room remains part of the principal home and is exempt.
If there are distinct areas of the property used for business purposes these areas are not part of the principal home and are NOT exempt. A valuation of this part of the property should be obtained from a professionally qualified valuer if it appears that this may affect the income support recipient's entitlement.
Example: The principal home is located behind a shop. The shop is only used for business purposes. It is not used primarily for private or domestic purposes. The shop is NOT an exempt asset.
Exemption of proceeds from selling the principal home
SS Guide 18.104.22.168 Exempting the Principal home - Sale Proceeds (from 01/07/2007) discusses the principal home sale proceeds exemption.
Exemption of principal home insurance or compensation payments
SS Guide 22.214.171.124 General provisions for exempt assets discusses the assessment of insurance or compensation payments relating to the principal home.
Act reference: SSAct section 1118 Certain assets to be disregarded in calculating the value of a person's assets, section 1118(2) For the purposes of this Act…