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
  • private company shares that cannot be sold
  • 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)
  • demand for the land
  • general farm incomes
  • legal impediments to commercial use (see example 2)
  • expenses incurred if the farm is leased (see example 3)
  • 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 Notional ordinary income - overview, Notional Ordinary Income - Person's Farm Used by a Family Member, Notional Ordinary Income - Other Farming Situations

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