The Guides to Social Policy Law is a collection of publications designed to assist decision makers administering social policy law. The information contained in this publication is intended only as a guide to relevant legislation/policy. The information is accurate as at the date listed at the bottom of the page, but may be subject to change. To discuss individual circumstances please contact Services Australia.

1.1.C.207 Commercial lease value

Usage

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), or
  • value of water licences, 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 4.6.7.80 Notional ordinary income - overview, 4.6.7.110 Notional Ordinary Income - Person's Farm Used by a Family Member, 4.6.7.120 Notional Ordinary Income - Other Farming Situations

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