Determining homeowners and non-homeowners 108-04070010

The principal home is generally the home in which the customer lives for the greatest amount of time each year.

A customer is not considered a homeowner unless:

• the customer, or their partner, owns the home in which they live, or
• they have reasonable security of tenure, or other arrangement (for example, life interest, or their home is owned by a trust or company they have an interest in)

The principal home includes any allowable curtilage. For all new claims from 1 January 2007, the Assets Test assessment for the principal home and curtilage has been restricted to the customer's house and the adjacent land on the same title document. This is known as the 'single title rule'. Note: a single title document may have more than one parcel of land included.

The term curtilage means the land surrounding the home. There are now two curtilage tests used to determine a customer's allowable house and curtilage concession, a 'private land use test' and an 'extended land use test'. A grandfathered savings provision for real estate will grandfather concessions for real estate for two groups of existing customers on payments prior to 1 January 2007. The savings provision will cease to have effect when the customer's payment is cancelled for any reason, or if they leave the property after 1 January 2007.

Part of the principal home may be assessed as an asset if a person uses their home to produce income for example by conducting a business on the premises, or if the home includes a self-contained living area that is let out to a person other than a near relative. An example of a self-contained living area or self-contained flat is an area with private or separate sleeping, cooking and bathroom facilities. Whether a dual occupancy home built on a customer's land is part of their principal home, is determined by who paid the construction costs.

If a customer, or their partner, has more than one home:

• their principal home is the one in which they spend the greatest amount of time, unless
• they spend the same amount of time in each of them, in which case the most expensive home is defined as the principal home

The property which is not the principal home is assessed as an asset even when the customer or their partner is living in the property.

If a customer or their partner spends a considerable amount of time in a home they do not own, the home they own is the principal home.

Note: the customer, or their partner, may live in the home that they own for 5 months a year and live the rest of the year in holiday rental accommodation. The home they own remains their principal home.

Any real estate apart from the customer's principal home or house and curtilage, is an assessable asset under the Assets Test. See Assessment and sale of real estate and timeshare asset for more information.

If a customer, or their partner, sells their principal home any portion of the proceeds intended to be used to purchase, build, rebuild, repair or renovate a new principal home is disregarded for assets test purposes. If the sale is:

• before 1 January 2023, up to an initial 12 months after the sale. This exemption can be extended for up to another 12 months if certain criteria are met. If the proceeds are held as a financial investment, they are subject to the deemed income provisions
• from 1 January 2023 onwards, up to an initial 24 months after the sale. This exemption can be extended for up to another 12 months if certain criteria are met. If the proceeds are held as a financial investment, they are subject to the proceeds intended for the new primary home being deemed at the lower deeming rate only

A customer meeting these conditions is considered to be a homeowner during the exemption period.