Many retirees assume that selling their home will not affect their Age Pension, but this is not always the case. While your primary residence is usually exempt from the assets test, the situation changes once the property is sold. The money you receive from the sale can be counted as an asset, even if you plan to buy another home.
What Happens After You Sell Your Home
After the sale is completed, the proceeds are often kept in a bank account while you search for a new property. During this period, these funds may be included in the assets test. If your total assets exceed the allowed limits, your Age Pension payments may be reduced or even stopped. This can come as a surprise to many retirees who expect their payments to remain stable.
Temporary Exemption for Buying a New Home
There is a rule that can help protect your pension during this transition. If you intend to purchase another principal residence, the proceeds from your home sale may be temporarily exempt from the assets test. However, this exemption is not automatic. You must clearly show your intention to buy another home, and there are strict time limits that must be followed.
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Importance of Timing and Conditions
Timing plays a very important role in this process. If you take too long to purchase a new property, the exemption period may expire. Once the exemption ends, any remaining funds from the sale will be fully counted as assets. This can lead to a reduction in your pension payments or even a temporary suspension. Keeping proper records and acting within the allowed timeframe is essential to avoid financial stress.
How to Protect Your Pension
To reduce the risk of losing pension benefits, it is important to plan carefully. Try to align the timing of your home sale and purchase as closely as possible. Keep clear documentation that shows your intention to buy another home, and make sure to update Centrelink with accurate and timely information. Being proactive can help you maintain financial stability during this transition period.
Disclaimer
This article is for informational purposes only and reflects general information as of 2026. It does not constitute financial or legal advice. Always verify current rules and consult a qualified professional before making any property or pension-related decisions.
