Assessing and coding real estate details 106-07100130

To code the business details, see Factors to determine self-employment and Assessing and coding Business details for sole traders and partnerships MOD F

The business details must be updated on the Real Estate Business Details table before the real estate can be linked to the business. Go to Step 2.

If real estate is to be coded as part of a new claim assessment, make the update within the new claim transaction.

The Real Estate Business Details table is used to record the type, description and address details of a business or real estate in Australia.

E607CQ: Real estate information must be recoded if the customer's relationship status has changed since the Real Estate (RE) screen was last updated.

Select Add to open the Create Real Estate Business Details window and complete the required fields:

• Real Estate/Business Type: select the most relevant Real Estate/Business type from the dropdown options to make sure it is assessed correctly, see Resources page for more information
  Note: if a customer owns a block of units on one title, code as one property entry on REBS (not one entry for each unit). If separate titles are held for individual units/properties within the same complex, these should be coded as individual entries on REBS as separate properties
• Description: this field is not compulsory but can be used to enter a business or property name
• Principal Home: enter 'Yes' if the real estate is the customer's principal home or ‘No’ if not the principal home. Note: if a business is being updated coding of this field is not required
• Authority To Inspect: 'Yes' or 'No'. It is important that this field is coded as it is required by the agency's third party contracted valuers to arrange access to the property for onsite inspections
  Note: where a customer changes their response to the authority to inspect it must be updated. For example, if a customer provides a new or updated MOD R or A1614 form and previously had 'Yes' but it is now 'No', it is important this field is updated to reflect the most recent instructions. The Authority to inspect must be able to be supported. Written evidence of the authority to inspect must be available to view on the customer's record. If it is not available to view, this field should be updated to 'No'
• Multi Title Indicator: this field is for information only. This field is used for real estate only, not for business details.
  • Code 'No', where the customer's property has a single title document, even if it is made up of multiple lots.
  • Code 'Yes', where a customer's property is on multiple titles.
    Note: If one property has multiple titles that are all adjoining, record the property as one entry only on REBS. See Resources for examples
• Land Titles Reference: enter the land title reference:
  • if the property has multiple land title references, record each individual reference. Additional information can be coded on Real Estate Valuation Information (REVI) table in the Other Circumstances field. See Resources for examples
  • if there are multiple lots, record each lot and plan number. If more room is required, additional lots/plans can be noted on Real Estate Valuation Information (REVI) table in the Other Circumstances field
  • if the title reference has not been provided by the customer, most rates notices will contain land reference numbers. Code all lot numbers as they appear on the rates notice. See Resources for examples
  • if the property is to be assessed under the extended curtilage provisions, complete the Other Circumstances: field on the Real Estate Valuation Information (REVI) table with the title reference principal home is on
  • if the property includes a water licence, complete the Other Circumstances: field on the Real Estate Valuation Information (REVI) table with the water licence reference number and details
  • if the property is being used as security for the Home Equity Access Scheme, the text recorded in the Land Titles Reference field(s) will show in correspondence to the customer. Changes should only be made by the Home Equity Access Scheme National team (region code PLS)
• Business or Property Status: update if sold (SLD), gifted/transferred (GFT), no longer assessable (NAA) or business has ceased trading (CEA)
• Address Line 1, Suburb, State Code, Post Code: code the address details as it appears on the current rates notice. The property must be able to be clearly located and identified. For more details on coding a specific address type, see Table 3

If a:

• business is being recorded, go to Step 3
• property is being recorded, go to Step 4

Real estate should not be linked to a business unless advised and assessed by a Complex Assessment Officer (CAO). Linking real estate to a business will not allow the real estate to be included in the risk-based approach to real estate assessment.

If full details of the business are not known, complete as much as possible to allow the link to the real estate to be made. For example, MOD F and Income Tax Return has not been supplied.

Update business details by coding the following fields:

• Event Date: appropriate event date
• Net Income ($): code total actual net income or loss from the business for the relevant frequency.
• Income Frequency code: select the frequency of income
• Income Own Customer/Partner (%): percentage of income earned by customer and/or partner. Income Earn Indicator/Partner: if income is earned by customer and/or partner select ‘Yes’.
• Hours Per Fortnight Customer/Partner: Record the details for customer/partners who required self-employment work hours to be counted to satisfy the activity test.
• Net Assets Amount Customer/Partner: the business net value for customer and/or partner
• Valuation Source Code: the appropriate source
• Rural Exempt: if required select the appropriate option
• Work Bonus Customer (%)/Work Bonus Partner (%): this field is only completed for customers and/or partners with self-employment income earned from personal exertion. See Work Bonus and balance for pensioners of Age Pension age.
• Select Save

Note:

• Linking a business to real estate will occur from the Real Estate record (Real estate is not to be linked to a business unless advised and assessed by a Complex Assessment Officer (CAO).
• When linking a provisional business to real estate, the transaction needs to be taken to the Entitlements (ELD) screen so that a business/real estate ID is created from Customer First/Customer Record.

See:

• Assets and liabilities of a business for full details on how to determine business income and assets for a business
• Income and expenses of a business for details on determining business income
• Work Bonus and balance for pensioners of Age Pension age

Complete the Real Estate Details table:

• Event Date: the date the change in circumstance occurred, for example, the date the property was rented out or came into ownership. Note: if the customer is advising of an undisclosed property, valuations may be required for dates in the past, or historical dates. For example, the date the customer obtained the property (purchased, inherited) or the date payment was granted. See Valuation of real estate and other assets for more details.
• Curtilage Type:
  • GRF - grandfathered, for customers whose curtilage is assessed under the grandfathered savings provision for real estate, grandfather's concessions for real estate before 1 January 2007. Note: existing customers with curtilage recorded as of 31 December 2006 were automatically assessed as curtilage type GRF. Make sure that a new assessment of curtilage is undertaken, and the curtilage type is updated to the appropriate code
  • EXT - extended, where the customer satisfies the extended land use test
  • PLU - for customers who do not satisfy the extended land use test
  • Leave field blank - for properties that are not the principal home
  • For more details on house and curtilage assessments, see Assessing house and curtilage
• Actual Valuation Date: the date of the previous valuation. This field does not need to be manually updated.
• Asset Valuation Source: is the source of the real estate valuation. For new properties, the valuation source will generally be CLI
• Business Link ID: If a business is to be linked to real estate, Select the Business ID number from the drop down (located in ID table against the Business). Note: When linking a provisional business to real estate, the transaction needs to be taken to the Entitlements (ELD) screen so that a business/real estate ID is created from Customer First/Customer Record. (See step 8)
• RAF Code: used to identify that the income and asset value of the farm is exempt from the gifting provisions under the Retirement Assistance for Farmers (RAF) Scheme. The income and assets will be included in the Net Income/Net Assets calculated on this screen but will not be included in the Total Income/Asset calculation.
• Asset Own Customer (%): the percentage the customer has in the property
• Asset Own Partner (%): the percentage the partner has in the property
• Current Market Value ($): the amount should represent the current value of the whole property.
  • including the principal home (if appropriate) and any other dwellings
  • It should include the value of any Assessable Water Rights related to the property
  • Note: the assessment of water assets for Farm Household Allowance (FHA) customers is different than the assessment under social security policy, see Assessing assets for Farm Household Allowance (FHA)
  • Other business assets, including farm sheds, equipment and machinery should be recorded as Other Assets on the Other Assets (OASS) screen and not included in the whole property valuation
  • Property values shown on council rates notices are for calculating council rates, fire and ambulance services or other taxes. They do not always indicate the current market value of a property
  • A current market valuation shows how much a property would be expected to sell for in the current market

If the property has previously been recorded and the customer is providing a new estimated value, see:

Reassessing the value of real estate and other assets on customer records for customers (and/or) partners who are current on payment

Valuation of real estate and other assets for customers (and/or partners) who have lodged a new claim

• House & Curtilage Amount ($): If applicable enter the value of the principal home and surrounding curtilage. For assessment assistance, see Assessing House and curtilage

Only one item of real estate with a home and curtilage amount can be coded for each customer. For properties being assessed under:

• Private Land Use - code the value of the principal home and the surrounding 2 hectares of land only (this value must be less than the current market value field)
• Extended land Use
  • if the whole property is on one title only, code the value of the principal home and all the land on the title. (this value must be the same as the current market value field)
  • if the property is on more than one title, code the value of the principal home and all the land on the same title as the home (this value must be less than the current market value field)
• Single titles may contain several lots. It is important to assess house and curtilage according to the title/s
• If any part of the property is being used for commercial or business purposes the customer may not be entitled to a house and curtilage exemption

If the customer is providing an updated value for House & Curt only, treat the update the same as if the customer were providing an updated estimate for the whole property.

For examples on house and curtilage assessments, see the Resources page.

• Mortgages or Loan ($): if there are mortgages or loans on the real estate, code the value of the mortgages or loans. For help with coding, see Loans and liabilities against assets
  Note: if the property is not a principal home and is used as security for a loan payment under the Home Equity Access Scheme (HEAS), a Complex Assessment Officer will update this field with the HEAS debt balance.

If a customer borrows money to buy an investment property and the loan is secured by a mortgage:

• over an exempt asset/s only (For example, their principal home), the mortgage cannot be offset against the investment property. That is, the mortgage used to buy the investment property cannot reduce its assessable value
• on both their principal home and another assessable asset (such as the property being bought), the mortgage must be apportioned. A portion of the mortgage may be used to offset the new property’s assessable value. See Resources in Loans and Liabilities against assets for a link to the apportionment tool
• House Contents ($): code the value of house contents that belong to the customer (if any)
  • Note: the system does not apportion house contents based on the asset ownership percentage coded. If the customer is single, 100% of the value coded in this field is applied to the customer. (If they are partnered, 50% is applied to each partner)
  • If this property is the customer's home do not record house contents here. Household contents and personal effects are recorded on the Other Assets (OAS) screen

• Other Assets ($): if there are any other assets related to this real estate that belong to the customer, code their value. The system does not apportion other assets based on the asset ownership percentage coded.
• Livestock ($): if there is any livestock related to this real estate that belongs to the customer, code the value of the livestock. The system does not apportion the value of livestock based on the asset ownership percentage coded.
• Income Own Customer (%): the customer's percentage of the income derived from the property
• Income Own Partner (%): the partners percentage of the income derived from the property
• Income Valuation Source: the source on which the income valuation figures are based
• Gross Annual Income ($): the total income derived from the property
• Annual Interest ($): the interest amount paid (in whole dollars) for a loan or mortgage. This is usually obtained from the rental property schedule of the business, a personal ITR or a profit and loss type statement. Interest payments on a mortgage for the property concerned are allowed as an additional deduction from the amount of income to be assessed
• Allowable Income Deductions ($): the allowable deductions from the gross income, not including the interest paid for loans or mortgages. Details are usually obtained from the rental property schedule of the business, a personal ITR or a profit and loss type statement. For more details, see Business deductions and Resources page for examples of rental income assessments
• RCA Former Principal Home: only for residential aged care (RCA) customers. If the property was the customer's former principal residence at the time of entering aged care, a Yes indicator is required to make sure:
  • the property remains exempt for the RCA asset assessment, and
  • Included in the Income Support Payment asset test assessment
• Rural Exempt: if required select the appropriate option
• Valuers Job Number: used to record the agency's contracted third-party valuer's reference number for their valuation if they valued the property
• Valuers Property Number: the number assigned to the property by the agency's third-party valuer when it was first valued by them (this field is not required)

See:

• How the system derives the net asset value of real estate
• Assessing income from real estate and timeshare
• Work Bonus and balance for pensioners of Age Pension age
• Assessing house and curtilage

Complete the mandatory fields on the Real Estate Valuation information (REVI) table. These fields will be different depending on the type of Real Estate selected.

The REVI table records details about the property that is required for a valuation to occur, such as property size, number of buildings. (For existing properties, any previous, old or outdated notes or details should be deleted)

On the REVI table, code the following:

• Event date – ‘todays’ date
• Land area – in acres, hectares or square metres
• If applicable:
  • Floor area
  • Number of bedrooms/rooms
  • General condition
  • Construction materials
• Other circumstances
• Improvements
• Purchase details - if available
• Authority to inspect and details of person to be contacted for an inspection

This information assists with valuing the property. If any of the information is missing, make genuine attempts to obtain it.

The Improvements, Other Circumstances and Directions to Property fields allow free text.

Examples of some additional information that can be included (but are not limited to):

• Improvements field:
  • If there is more than one dwelling on the property, a building description including number of rooms and construction materials
  • Any improvements (For example, a tennis court, large garage) that the customer may have included
  • Other buildings (For example, stables, storage sheds, pool house)
• Other Circumstances field:
  • Notes regarding if a full inspection (onsite) valuation is required. See Reassessing the value of real estate and other assets
  • Water licence information
  • Which titles the principal home is on for extend land use house and curtilage assessments
  • If any part of the property is being used for commercial or business purposes
  • Any damage the property may have sustained (For example, flood or fire)
  • Environmental impacts, topography, overlays etc
  • Additional lot and plan number or title reference numbers
• Directions to Property field
  • Hints on finding the property if it is hard to locate

Providing all available information and removing any old or irrelevant information will enable a successful and accurate valuation.

Record real estate type OTH – Other for assets such as beach boxes, mining leases and car park spaces.

Record real estate type SCF – Self Contained unit, attached to home for self-contained flats and other dwellings on the same title as the principal home that are currently rented (other than to a near relative). See Assessing house and curtilage.

Valuation

For new properties or for customers making a new claim for payment, see Valuation of real estate and other assets for details about when a valuation is required.

For existing properties or for customers already current on payment, see Reassessing the value of real estate and other assets for details about when a valuation is required.

Purchase Price ($): enter the purchase price for the property. If the property has been purchased recently, other updates may be required to other assets. For example, bank account balances, managed investments. Leave the field blank if the property was not purchased.

Purchase Date: enter the date the property was purchased. If the purchase date is not known an approximation is acceptable or the field can be left blank.

Purchase Indicator: field records who purchased the property. 'Yes' should be recorded if the customer and/or their partner purchased the property. Leave the field blank if the property was not purchased but inherited or gifted.

Select Save

Has a CAO determined that the business needs to be linked to real estate?

• Yes:
  • Select Assess and address any errors/warnings
  • Select Assess to send the transaction details to ISIS. This will allow the Business ID to be returned to Process Direct
  • Return to the Errors (SWE) screen to link business to real estate by selecting Back or keying SWE in the Super Key
  • Key REBS in the Super Key field and select Enter
  • Take note of the ID for the business required to be linked to the real estate
  • Expand to view the Real Estate Details table
  • Select Edit
  • Select the business link ID dropdown in the Change Real Estate Details window
  • Select Appropriate business ID number from the list
  • Select Save
  • To complete the update, proceed to step 9
• No, go to step 9

Once all relevant fields are completed:

• Select Save
• Select Assess and address any errors/warnings
• Select Assess again, then select Finish
• Record any additional Notes in the Finalise window
• Select Finalise to complete the transaction.