4.6.8.20 Defining Title Document & Exceptions

Summary

This topic discusses:

  • the definition of the term 'title document',
  • usage of the term,
  • dual properties held on one title document, and
  • exceptions to land being held on one title document.

Definition of the term title document

The term title document is:

  • the certificate of title for the land that is registered under a Torrens system (i.e. the vast majority of privately owned land in Australia), and
  • in any other case (i.e. old title land), the last instrument by which title to the land was conveyed.

Act reference: SSAct section 11A(11)(a) in relation to land title which is registered under, section 11A(11)(b) in any other case-the last instrument by…

Usage

This definition is used when assessing the land adjacent to the principal home under the assets test.

Act reference: SSAct section 11A(11) Definition of title document, section 11A Principal home definition for the…

Exceptions to land being held on one title document

Three exceptions exist to the rule requiring land adjacent to the principal home to be held on one title document. Under the 3 exceptions land held on more than one title document can be treated as if it were held on the same title document as the person's dwelling-house. The exceptions are:

  • where the dwelling-house is located on both blocks of land, or
  • where all or part of the blocks of land are protected by a law because of the land's natural, historic or Indigenous heritage, or
  • where the alienation of one of the blocks would seriously undermine the function of the house as a dwelling.

The 3 exceptions apply to income support recipients who are seeking an exemption from the assets test under the private land use test and the extended land use test.

Exception 1: The dwelling-house is located on both blocks of land.

This exception requires the dwelling-house structure to be located on both blocks of land.

Example: If the second block of land (on a separate title) includes an extension that was made a number of years ago and is connected to the main dwelling-house, then the second block can be treated as if were held on the same title document.

This exception does not extend to structures that are separate, or not attached, to the dwelling-house.

Example 1: If the second block of land (on a separate title) includes farm machinery sheds, separate to the dwelling-house, then the second block CANNOT be treated as if it were held on the same title document.

Example 2: If the second block of land (on a separate title) includes a separate dwelling-house, then the second block CANNOT be treated as if it were held on the same title document.

Exception 2: Both blocks are protected under a law of the Commonwealth, State or Territory because of its natural, historic or Indigenous heritage.

This exception requires a legal restriction being placed on a person that requires both blocks of land to be treated as a whole. That is, the restriction means that the second block is not capable of being sold separately.

Example: A second block of land (on a separate title) includes a native garden, and the dwelling-house and the native garden are together formally protected under law. If the protection means that the second block is unable to be sold separately then the second block could be treated as if it were held on the same title document.

Exception 3: The alienation of one of the blocks of land without the other will seriously undermine the function of the house as a dwelling.

This exception means that without considering the other block of land the house would be unable to perform:

  • the essential functions that would reasonably be required of a house as a dwelling, such as cooking, cleaning and sleeping, or
  • essential housing related infrastructure functions that would reasonably be required for a house, without connection to mains water, power or sewerage services, to function as a dwelling.

Example: If a septic tank or the main supply of water from a bore is (and originally was) located on an adjoining block of land, and it is not reasonable to expect that these functions can be relocated to the dwelling-house block, then the second block can be treated as if it were held on the same title document.

The structure of the house and the essential housing related infrastructure should have been in place for a reasonable amount of time for the income support recipient to gain access to the exception. An income support recipient cannot access this exemption if they have made alterations to the structure of the house and essential housing related infrastructure since 8 May 2006 that previously existed on a single title.

Act reference: SSAct section 11A(1) Principal home

Access roads & lanes

An access road or lane, which is the only way possible to the principal home, may be treated as if it were held on the one title document if the access road or lane makes up:

  • the entire area of land on the second title, or
  • the majority of the area of land on the second title.

Amenity

The function of a dwelling-house does not relate to a mere loss of amenity. SSAct section 11A(2) notes 'a mere loss of amenity, such as the loss of a swimming pool, garden, tennis court or view, would not seriously undermine the function of a house as a dwelling.'

Example: If a pool is located on a separate title to the home then the title where the pool is located cannot be considered as if it were held on the same title document as the home. The title (where the pool is located) will be assessed as an asset.

Extended living area

It is NOT intended that an extended living area located some distance from the dwelling-house could be considered an amenity. The block with an extended living area CANNOT be treated as if it were held on the same title document.

Example: An outdoor barbecue area that is located on a separate title some distance from the dwelling-house would be considered an amenity and the land CANNOT be treated as if it were held on the same title document.

Act reference: SSAct section 11A(2) The Secretary may determine that the land is to be treated…

Last reviewed: 6 February 2017