4.6.3.50 Assessing dual occupancy homes
Summary
When determining whether a dual occupancy home (1.1.D.260), built on land on the same title document (4.6.8.20) as the income support recipient's home, is part of their principal home, factors such as who paid the construction or purchase costs should be taken into consideration.
This topic discusses the effect on the principal home definition when:
- the income support recipient paid construction or purchase costs
- the income support recipient did not pay construction or purchase costs
- the second dwelling is a granny flat interest, and
- both dwellings are in a block of flats or units.
Act reference: SSAct section 11A(1) Principal home
Income support recipient paid construction or purchase costs
The following table shows the assessability when the income support recipient, or their partner (1.1.P.85), paid construction or purchase costs.
| If the dual occupancy is … | then it is … |
|---|---|
| vacant | part of the income support recipient's principal home. |
| let to a near relative (1.1.N.20) | part of the income support recipient's principal home. |
| let to a person other than a near relative | NOT part of the income support recipient's principal home. |
Example: An age pensioner pays for construction of a second house on the same title as his home so he can receive a small income. The house is let to a friend. The value of the second house is included in his assets. Rental income (4.3.8.30) is assessed under the income test.
Income support recipient did not pay construction costs
If a person other than the income support recipient, or their partner, paid construction or purchase costs and this person has a beneficial or equitable right or interest in the second dwelling, then the recipient does NOT have an interest (1.1.I.185) in the dwelling and it is NOT an asset (1.1.A.290) of the recipient.
Example: An age pensioner's son pays for construction of a house on his elderly widowed mother's farm so he can work the property to its full potential. The house is on the same title as his mother's home. The son has receipts and an agreement with his mother that the house belongs to him for life. The value of her son's house is disregarded when assessing her assets.
The surrounding adjacent land (4.6.8.10) is assessed using normal principal home assessment provisions for the income support recipient.
Explanation: Under dual occupancy residential developments the title to the land is not altered.
IF the person living in the second dwelling is an income support recipient AND the person has a beneficial or equitable right or interest in that dwelling (other than a granny flat interest), AND the delegate is satisfied that the person has reasonable security of tenure, then they are a homeowner and the second dwelling is their principal home.
Act reference: SSAct section 11A(1)(a) if the principal home is a dwelling-house-the land adjacent …, section 11(4) Homeowner
Second dwelling is a granny flat
If the second dwelling is a granny flat right or interest the property is assessed using the granny flat provisions.
Policy reference: SS Guide 4.6.4.50 Granny flats - features, rights & interests, 4.6.4.60 Granny flats - reasonable value conversion factors, 4.6.4.70 Granny Flats - Additional Features
Both dwellings are in a block of flats or units
IF the income support recipient's principal home is in a block of flats or units AND the recipient owns a flat or unit in the same block, the second dwelling is NOT part of the income support recipient's principal home. The second dwelling is assessed as an asset of the recipient.