Assessment and sale of real estate and timeshare asset 108-04130010

A system error may show if:

• changes are made to Real Estate/ Business Summary (REBS) screen details, and
• updates have not been made since the customer’s relationship status changed.
  This will happen if the customer is single and the real estate is still recorded as partly or fully owned by the partner

Note: Do not code $1 for the property value or 1% or 0.1% asset owned. This creates issues with the agency’s external contracted valuers, and valuations are still auto requested at a cost to the agency.

If this error occurs when attempting changes to the customer's REBS details:

• On the Real Estate (RE) screen, print or copy all pages about the impacted property or business, showing the Current Market Value, Event Date and other relevant details. Include all historical pages
• In the one activity:
• delete the relevant property from the REBS screen
• recode on REBS as a new property, using the screen prints to recreate all historical entries on RE, including relevant details such as Valuers Job Number: and the correct % Asset Owned:
• if system error 'E016RB – Asset valuation source of AVO not valid' shows, recode all AVO entries prior to 28 June 2014 using the Asset Valuation Source type CLI
• ensure all other Asset Valuation Source: codes match the historical entries
• if the REVI screen was originally blank, it may be necessary to locate the property details on a previously supplied MOD R or online claim questions
• finalise the activity
• DOC the record detailing the updates made, including change in % of ownership and AVO error resulting in alternate coding of CLI

Note: this should not create any overpayment or arrears payment for the customer if no other income and assets updates are completed in the same activity. Once the property details are recoded, REBS should allow updates without the error appearing.

Check the former partner’s record to see if:

• the property is still being assessed
• the former partner is deceased see Undoing a death action
• updates are needed. Do not use the details supplied by the customer to update the former partner’s record

An update is needed because the:

• customer has paid a deposit for real estate but the sale is not finalised
  see Purchasing another residence
• customer is advising a change in rental income received
• value of an encumbrance/loan on real estate has changed
  see Table 3, Step 4 in Assessing income from real estate and timeshare
• value of a property already on REBS has changed, or the customer disputes the current valuation
  see Maintaining the value of real estate assets on customer records
• customer advised of an update to the mortgage/encumbrance recorded (including updating a progressive drawdown for a partially constructed home) see Table 2 in Loans and Liabilities against assets

For when the:

• customer is advising of new or unrecorded real estate (including if the exemption period for the construction of a new home has expired), see Table 3
• property has been sold, gifted or disposed of and the property was:
• owned by a business, trust or company.
  This is not covered in this procedure, see Steps to assess an interim balance sheet
• sold by instalment or deferred payment,
  see Sale of real estate by instalment or deferred payment
• neither of those, see Table 4
• property is used to run a business, including when the property is the principal home, see Table 5
• asset is a Timeshare, see Table 6
• customer has moved into a property recorded on REBS, see Table 7

When a customer advises of a new real estate asset, a net market value of the real estate must be established.

If the customer:

• is receiving a Blind Pension, go to Step 4
• advising of a farming property, go to Step 3
• advising of any other property (including partially constructed homes), go to Step 2

If the customer advises of a new real estate asset, to establish a net market value, direct the customer to the relevant online service or request the following forms, see Requesting information (CLK):

• Real estate details (MOD R) form, or
• Income and Assets Update (MODIA/SA220)
• Business details (MOD F) form. (If the customer's real estate is used for business purposes, issue a MOD F and MOD R)

Note: when a customer is conducting a business from their principal home:

• only assess as an asset the portion used solely for business purposes:
• if part of the home is used for both domestic and business purposes, the assets test exempt status of the customer's principal home is retained, so a MOD R is not required

Procedure ends here until documents are returned.

The Rural Property Questionnaire (Q454) is used along with the MOD R. This collects more details from the customer for a third party valuer to accurately value the property.

In most cases, if the property operates as a commercial enterprise, issue the Q454 in addition to the MOD R.

A Q454 is not required to be issued for:

• smaller properties such as hobby farms with minimal farm improvements or bush blocks.
• where the whole property is exempt because it is:
• the principal home, or
• an exempt farm asset

Procedure ends here until documents are returned.

If the customer is receiving a Blind Pension, only issue a MOD R and/or MOD F if they:

• are being assessed for rent assistance, or
• have a partner and the partner is not on a means test free payment

In these cases, details are still needed to determine Rent Assistance or the partner's rate.

Procedure ends here until documents returned.

Gifting

If the property has been gifted or sold for less than its value, deprivation may have occurred. For more information, see Assessing deprivation/gifting.

Information needed

If the customer can supply all relevant details of the sale of the home, and the value of the property is similar to the monies received from sale, update this in one transaction, based on their verbal advice.

Verification is only needed if a mortgage, capital gain or other relevant details could not be supplied.

If the customer has sold only a part share of the property and still owns some of the property, use the appropriate percentage they now own to update the REBS screen.

Note: for overseas real estate, update the Foreign Income and Assets (FID) screen.

Recode real estate information if the customer's relationship status has changed since the REBS screen was last updated. See Assessing and coding real estate details

If the customer:

• is able to provide the information verbally, go to Step 2
• needs to supply more information or verification, go to Step 3
• has supplied documents, go to Step 4

Complete the update:

• access the customers record in Process Direct Customer Summary
• use Super Key field to navigate to screens
• enter START into the Super key
• select Income and Assets Update from the Task Selector options
• select Real Estate/Business Details (REBS)
• select Start to initiate the workflow
• on REBS:
• select edit against the property to be updated to access the Change Real Estate Business Details options
• update the Principal Home field, if appropriate, and
• update the Business or Property Status field with the valid option from the dropdown list
• select Save once updates are made
• update Receipt Date and Channel and Save
• expand property details
• on the Real Estate Details line select add , to access the Create Real Estate Details options:
• code the Event Date field as the date of event (DOV)
• code the Asset Owned Customer (%) and Asset Owned Partner (%) fields as '0' and the Current Market Value ($) field as '0'. Note: for overseas real estate, update the Foreign Income and Assets (FID) screen
• code House & Curtilage Amount ($) field as '0'
• if the customer was receiving income from the property, code the income as zero on the following fields - Gross Annual Income ($) '0', Allowable Income Deductions ($) '0', Annual Interest ($) '0'
• if the customer made a capital gain when they sold their property, no income is assessed. Update any investments or assets purchased from the proceeds of the sale
• request the relevant documents (including documents showing any mortgage on the property). See Requesting information (CLK). Select to be provided within 14 days
• select Assess
• check the payment outcome on Entitlements (ELD) and select Finish
• If the Service Officer has used the Process Direct Income and Assets workflow, NOTES prepopulate automatically and display for review
• Add any more information at this point, as per Online Document Recording (ODR)
• once NOTES are complete, Finalise. The transaction completes and NOTES replicate to the Document List (DL)

Procedure ends here.

• For allowance and Parenting Payment customers, request Additional Income and Assets (MOD iA) form, select to be provided within 14 days. See Requesting information (CLK)
• For pension customers, request an Income and Assets Update (SA369) and select to be provided within 21 days. See Requesting information (CLK)
• If ownership percentage has changed, (for example, a part sale and/or mortgage balance needs adjusting), request the customer provide verification, select to be provided within 14 days. See Requesting information (CLK)
• Procedure ends here until documents are returned

If the sale was already recorded, confirm the details on the documents match the customer's record. Cancel the scanned activity if one exists.

If the sale was not recorded when first advised, because of not enough information, record the sale using Income and Assets Update Task Selector (START) workflow. On REBS:

• select edit against the property to be updated to access the Change Real Estate Business options
• code the Principal Home field correctly
• update the Business or Property Status field with a valid code from the dropdown list and Save
• Expand property details and on the Real Estate Details line, select add to access the Create Real Estate Details options. Code the following:
• Asset Owned Customer %: '0'
• Asset Owned Partner (%): '0'
• Current Market Value ($): '0''
• If the customer was receiving income from the property, code the income as zero as follows:
• Gross Annual Income ($): '0'
• Allowable Income Deductions ($): '0'
• Annual Interest ($): '0'
• If the customer made a capital gain when they sold their property, no income is assessed. Update any investments, savings accounts or assets purchased from the proceeds of the sale

Procedure ends here.

Link new real estate to a business where it is unavoidable, for example, a non-primary production business where:

• there is a liability over all business assets (real estate and other), and
• the value of the net business assets excluding the real estate is negative

If linking is unavoidable, enter the details of the business first, then link the real estate to the business record.

Exemptions from the assets test for house and curtilage may apply if:

• the business real estate is also the customer's principal home, and the customer satisfies the extended land use test
• the customer is using part of their principal home solely for the business. In these cases:
• a valuation is not required
• it is not coded on the RE screen
• use the value of the portion used solely for business (as listed on a balance sheet or advised by the customer). Code it as a business asset on the Business Details (BUS) screen

Update as follows:

• Add the new business on REBS and code the Create Real Estate Business Details. The customer must uniquely identify the location of any real estate or business site they own or in which they have an interest. For more information, see Assessing and coding real estate details
• Code the Business Income and Assets detail. Press Save
• If linking is unavoidable, select Assess:
• From the Entitlements (ELD) screen, use the Back navigation option or in the Super Key type REBS to go back to Real Estate Business Details.
• When adding the real estate, select the new Business Link ID from the Business Link ID field dropdown list
• Code the new real estate details on REBS using the details provided on the MOD R. See Assessing and coding real estate details

For property used for business purposes, the completed MOD F must also be coded, see Assessing and coding the Business details for sole traders and partnerships MOD F.

Go to Step 3

If a customer's land and principal home on the one title document is exempt under the extended land use test, a valuation is not required and the customer's estimate of the property value is acceptable.

If the property was previously recorded on the customer's record, see Step 2 in Table 4.

For Australian properties

The Income and Assets Update Task Selector (START) in Process Direct can be used to update REBS:

• Access the customers record in Process Direct Customer Summary
• Use Super Key field to navigate to screens
• Enter START into the Super key
• Select Income and Assets Update from the Task Selector
• Select: Real Estate Business Details (REBS)
• Select Start to initiate the workflow.

On the REBS screen, select add to access Create Real Estate Business Details. The system automatically provides the Real Estate Details options to complete below the Real Estate Business Details, based on the option selected in the Real Estate or Business Type field. For coding information, see Assessing and coding real estate details.

Customers who own real estate as 'tenants in common', have their legal share assessed based on the agreed ownership percentage., For example, if a customer owns 40% of the property, use 40% of the whole property value.

For overseas properties:

• Use Income and Assets Update Task Selector (START), select Foreign Financials (FIPS/FPD/FID)
• Select Next to go to the Foreign Income (FIPS, FPD, FID) and code asset values of overseas real estate on the Foreign Income/ Assets (FID)
• Do not code overseas property on REBS
• Code the asset value in the relevant foreign currency and the system will convert it to Australian Dollars (AUD)
• The asset value automatically changes each month with variations in exchange rates
• See Foreign income and assets for further details

For information about when a valuation request may be required, see Valuation of real estate and other assets.

Overseas real estate

For information about when a valuation request may be required, see Valuation of real estate and other assets.

Centrelink International Services (CIS) may accept alternative source documents for overseas real estate in lieu of a valuation (for example, Italian tax returns).

Do not refer property owned under timeshare arrangements for valuation. For information on assessing and coding timeshares, see Table 6.

A valuation that is higher than a previous valuation, or a customer's estimate, is applied from the first payday after it is received.

When a valuation is lower than a previous valuation or a customer's estimate, apply the date of effect rules.

Exceptions are where:

• there is evidence the customer deliberately misrepresented details of the asset. The value may be applied from a date earlier than the valuation date
• the customer applies for a formal review of a current valuation. In this case, the review of decision date of effect rules apply

The payday definition is in Section 23 (1) on the References page.

Only raise a debt if a person deliberately misrepresents the details of the asset. When a debt shell is created due to a property value not being updated before the next payday after the valuation is received, this debt should be waived.

If the customer has a partially constructed house that is to be assessed as an asset and the property will not become the customer's principal home, a valuation of the fully constructed property may be required on completion.

Procedure ends here.

The legal structures of timeshare arrangements vary widely and can include a share in holiday homes/units, caravan parks, houseboats, etc. Do not request valuations for timeshare assets.

A MOD R is not required in most circumstances. If the customer provides evidence of the sale price or recent sale values then these are accepted. The asset value of a timeshare depends on when it was purchased. If it was:

• in the last 12 months, use the purchase price
• more than 12 months ago, use the most recent sale price within that timeshare. Customers should be able to obtain this from the timeshare management

A timeshare asset is purchased, sold or its value changes

• If the timeshare is already recorded on Other Assets (OAS) this must be ceased. From December 2015, timeshare in a property is assessed as a managed investment on a Direct Investment Account (SVDI)
• To cease the timeshare assessment on OAS, code the following fields:
• Expand the time share investment
• Add a new investment details entry
• Event Date Today's date. The same date of event is used for ceasing the timeshare when adding it as a Direct Investment Account (SVDI)
• Total Asset Value $0
• Select Save
• Update Receipt Date and Channel and Save
• Any income being assessed from the timeshare investment must also be ceased
• Procedure ends here
• To recode the timeshare, see Managed investments - adding a new investment
• If recording the timeshare for the first time, see Managed investments - adding a new investment
• If the timeshare is already recorded as an investment on Direct Investment Account (SVDI), see Managed investments - adding a new investment

• If the customer was previously a non-homeowner with real estate recorded as an asset, once the property becomes their principal home, it is no longer assessed unless there is excess land that is not exempt, as curtilage. Go to Step 3
• If the customer was previously a homeowner and has moved into the property recorded on REBS, the property on the REBS screen becomes the principal home and the previous home becomes an asset. Go to Step 7
• If the customer has moved out of their principal home, which is recorded on REBS, go to Step 2
• If the customer has sold their previous home, see Sale of principal home
• If the customer has sold their previous principal home and intends to use all or part of the proceeds of sale to renovate and move into a property they own which is recorded on the REBS screen:
• The proceeds of sale intended for renovation is exempt under the assets test if the renovations occur before the customer moves into their new principal home. Once the former REBS coded property is their principal home, no asset test exemption applies to any proceeds from the sale. See Sale of principal home
• The new principal home should no longer be assessed unless there is excess land that is not exempt as curtilage. Go to Step 3
• If the customer has sold their home with the intention of buying another, they have the following options:
• have the temporary home exempted from the assets test and the proceeds of the sale of their principal home assessed as an asset, (go to Step 3), or
• have the proceeds of sale exempted for an initial 12 or 24 months (depending on the date of sale) and the temporary home still assessed as an asset. Note: from 1 July 2007, the former home exemption may be extended for another 12 months if certain criteria are met. Go to Step 6

If the customer’s previous principal home was being assessed under the assets test, for example the land size is greater than 2 hectares, the full property may be considered an asset under the assets test when they move out.

If the customer has not sold or gifted the property, update the property details from the date the customer vacated to move to their new home:

• REBI screen – change Principal Home: from Y to N
• RE screen
• Curtilage Type: make field blank
• Current House & Curt.$: change to 0

Go to Step 5.

From 1 January 2007, the assets test assessment for the principal home and curtilage was amended to a single title rule. There are 2 curtilage categories used to determine a customer's allowable house and curtilage concession:

• private land use test, and
• extended land use test

A grandfathered savings provision for real estate may apply.

Do the home and curtilage rules apply to the real estate the customer is moving in to?

• Yes, see Assessing house and curtilage
• No, go to Step 4

The Income and Assets Update Task Selector (START) in Process Direct can be used to update REBS:

• Access the customers record in Process Direct Customer Summary
• Use Super Key field to navigate to screens
• Enter START into the Super key
• Select Income and Assets Update from the Task Selector
• Real Estate Business Details (REBS)
• Select Start to begin the workflow

If the property is no longer assessable, update the property details:

• Select edit against the property being updated to access the Change Real Estate Business Details options. Code the Principal Home field. Update the Business or Property Status field with 'NAA – NO ASSESSABLE ASSET VALUE' and Save
• Update Receipt Date and Channel and Save
• Expand property details and on the Real Estate Details line select add , to access the Create Real Estate Details options
• code the Asset Owned Customer (%) and Asset Owned Partner (%) fields as '0' and the Current Market Value ($) field as '0'
  Note: for overseas real estate, update the Foreign Income and Assets (FID) screen
• If the customer was receiving income from the property, update following fields:
• Income Own Customer (%) '0'
• Income Own Partner (%) '0’
• Gross Annual Income ($) '0'
• Annual Interest ($) '0'
• Allowable Income Deductions ($) '0'
• Select Save once updates are made

Finalise the assessment.

• If applicable, change the address on Address Details (AD, ADS, ADH) screen. For more information, see Changing address
• Update the Home Ownership field on the Accommodation (AC) screen to 'HOM - fully owns home'
• If customer is sharing with another person, who is not a close family member or partner, send a Relationship details (SS284) or Relationship Details - Separated under one roof (SS293), if required
• If applicable, code the full proceeds of the sale on the Savings Summary (SVS or SVDI) as a:
• Direct Investment Account (SVDI), or
• Savings Bank Account (SVP).
  Note: ensure the proceeds are only recorded once, so the asset is only counted once
• Select Save once updates are made
• Update Receipt Date and Channel and Save
• Finalise the assessment

Procedure ends here.

The portion of the proceeds of sale, which the customer intends to use to purchase, build, rebuild, repair or renovate a new principal home are an exempt asset for up to:

• 12 months from the date of sale for sales before 1 January 2023, with an extension of up to 24 months total in some circumstances
• 24 months from the date of sale for sales from 1 January 2023 onwards, with an extension of up to 36 months total in some circumstances

Most of the time, this date will be the property settlement date, and the lower deeming rate is applied when the funds are invested in financial assets. For further details see Sale of principal home.

The asset test exemption may be extended for up to an additional 12 months if the customer has a continuing intention to apply the proceeds of the sale to purchase, build, rebuild, repair or renovate a new principal home and have:

• made reasonable attempts to obtain a new principal home, and
• been making those attempts within a reasonable period (i.e., 6 months) after selling the principal home, and
• experienced delays beyond their control in obtaining a new principal home

All of the above criteria must be met for the customer to gain an extended principal home sale proceeds exemption For further details see Sale of principal home.

Update the customer's record

• Change the address on Address (AD, ADS, ADH). For more information, see Changing address
• If the customer is sharing with another person, who is not a close family member or partner, send an SS284 or SS293, if required
• Ensure the AC screen has been updated. See Sale of principal home.
• Code the proceeds of sale and the exemption. See Sale of principal home.

Any money intended for purchasing land or building another home

Land already owned (outright or mortgaged) by the customer on which they intend to build a new principal home, may be exempt from the assets test once the principal home sale proceeds have been received.

If the customer uses the proceeds of sale to purchase a block of land on which they intend to build a new principal home, the land may be exempt from the assets test for up to 12 or 24 months depending on the date of sale.

The total exempt asset value must not exceed the sale price of the old principal home.

• If a new block has been purchased:
• Adjust the balance of the proceeds of sale with the purchase price of the block of land see Sale of principal home
• Record all details in a DOC
• If a block of land is already owned, coded on REBS and is no longer assessable:
• Use the Income and Assets Update Task Selector (START) in Process Direct to update the block on REBS:
• Access the customer's record in Process Direct Customer Summary
• Use Super Key field to navigate to screens
• Enter START into the Super key
• Select Income and Assets Update from the Task Selector:
• Real Estate Business Details (REBS)
• Select Start to initiate the workflow
• Select edit against the real estate asset from REBS to access the Change Real Estate Business Details options.
• If the property is no longer assessable, update the Business or Property Status field with 'NAA – NO ASSESSABLE ASSET VALUE’ and Save
• on the Real Estate (RE) screen, code the % Income Owned field as '0', code the % Asset Owned field as '0' and the Current Market Value $ field as '0'
• Select Save
• Select Assess
• Check the payment outcome on Entitlements (ELD). If correct, select Finish
• If the Process Direct Income and Assets workflow has been used, NOTES prepopulate automatically and display for review
• Add any more details at this point, as per Online Document Recording (ODR)
• Select Finalise. The transaction completes and NOTES replicate to the Document List (DL)
• If the customer was receiving income from the block of land, zero the income:
• Expand property details and on the Real Estate Details line select add for the Create Real Estate Details options
• code the income as zero on the following fields:
• Income Own Customer (%) '0'
• Income Own Partner (%) '0’
• Gross Annual Income ($) '0'
• Annual Interest ($) '0'
• Allowable Income Deductions ($) '0'
• Select Save
• Select Assess
• Check the payment outcome on Entitlements (ELD). If correct, select Finish
• If the Process Direct Income and Assets workflow has been used, NOTES prepopulate automatically and display for review
• Add any more details at this point, as per Online Document Recording (ODR)
• Select Finalise. The transaction completes and NOTES replicate to the Document List (DL)

Procedure ends here.

Use the Income and Assets Update Task Selector (START) in Process Direct to update REBS:

• Access the customers record in Process Direct Customer Summary
• Use Super Key field to navigate to screens
• Enter START into the Super key
• Select Income and Assets Update from the Task Selector:
• Real Estate Business Details (REBS)
• Select Start to initiate the workflow
• Select edit against the real estate asset from REBS to access the Change Real Estate Business Details options. If the property is no longer assessable:
• update the Business or Property Status field with 'NAA – NO ASSESSABLE ASSET VALUE’ and Save
• on the Real Estate (RE) screen, code the % Income Owned field as '0', code the % Asset Owned field as '0' and the Current Market Value $ field as '0'
  Note: for overseas real estate, update the Foreign Income and Assets (FID) screen
• If the customer was receiving income from the property, Expand property details and on the Real Estate Details line select add , for the Create Real Estate Details options
• code the income as zero on the following fields:
• Income Own Customer (%) '0'
• Income Own Partner (%) '0’
• Gross Annual Income ($) '0'
• Annual Interest ($) '0'
• Allowable Income Deductions ($) '0'
• Select Save
• Update address details (AD, ADS, ADH). For more information, see Changing address
• As this property is now an assessable asset, issue a MOD R for details of the previous home, to be returned within 14 days. See Requesting information (CLK). Upon receipt of MOD R update property details on the customer's record
• If the customer is sharing with another person, who is not a close family member or partner, send an SS284 or SS293, if required
• Select Assess
• Check the payment outcome on Entitlements (ELD). If correct, select Finish
• If the Service Officer has used the Process Direct Income and Assets workflow, NOTES prepopulate automatically and display for review
• Add any more details at this point, as per Online Document Recording (ODR)
• Select Finalise. The transaction completes and NOTES replicate to the Document List (DL)

A system error may show if:

• changes are made to Real Estate/ Business Summary (REBS) screen details, and
• updates have not been made since the customer’s relationship status changed and the real estate is still recorded as partly or fully owned by the partner

Note: Do not code $1 for the property value or 1% or 0.1% asset owned. This creates issues with the agency’s external contracted valuers, and valuations are still auto requested at a cost to the agency.

If this error occurs when attempting changes to the customer's REBS details:

• On the Real Estate (RE) screen, print or copy all pages about the impacted property or business, showing the Current Market Value, Event Date and other relevant details. Include all historical pages
• In the one activity:
• delete the relevant property from the REBS screen
• recode on REBS as a new property, using the screen prints to recreate all historical entries on RE, including relevant details such as Valuers Job Number: and the correct % Asset Owned:
• if system error 'E016RB – Asset valuation source of AVO not valid' shows, recode all AVO entries prior to 28 June 2014 using the Asset Valuation Source type CLI
• ensure all other Asset Valuation Source: codes match the historical entries
• if the REVI screen was originally blank, it may be necessary to locate the property details on a previously supplied MOD R or online claim questions
• finalise the activity
• DOC the record detailing the updates made, including change in % of ownership and AVO error resulting in alternate coding of CLI

Note: this should not create any overpayment or arrears payment for the customer if no other income and assets updates are completed in the same activity. Once the property details are recoded, REBS should allow updates without the error appearing.

Check the former partner’s record to see if:

• the property is still being assessed
• the former partner is deceased see Undoing a death action
• updates are needed. Do not use the details supplied by the customer to update the ex-partner’s record

An update is needed because the:

• customer has paid a deposit for real estate but the sale is not finalised,
  see Purchasing another residence
• customer is advising of a change in rental income received
  see Table 3, Step 4 in Assessing income from real estate and timeshare
• value of a property already on REBS has changed, or customer disputes the current valuation
  see Maintaining the value of real estate assets on customer records
• advice of an update to the mortgage/encumbrance recorded (including updating a progressive drawdown for a partially constructed home)
  see Table 2 in Loans and Liabilities against assets

For when the:

• customer is advising of new or unrecorded real estate, see Table 3
• property has been sold, gifted or disposed of and the property was:
• owned by a business, trust or company.
  This is not covered in this procedure, see Steps to assess an interim balance sheet
• sold by instalment or deferred payment,
  see Sale of real estate by instalment or deferred payment
• neither of those, see Table 4
• property is used to run a business, including when the property is the principal home, see Table 5
• asset is a Timeshare, see Table 6
• customer has moved into a property recorded on REBS, see Table 7
• customer has moved out of a property recorded on REBS, see Table 7

When a customer advises of a new real estate asset, a net market value of the real estate must be established.

If the customer:

• is receiving a Blind Pension, go to Step 4
• advising of a farming property, go to Step 3
• advising of any other property (including partially constructed homes), go to Step 2

If the customer advises of a new real estate asset, to establish a net market value of the customer's real estate, direct the customer to the relevant online service or request the following forms, see Requesting information (CLK):

• Real estate details (MOD R) form, or
• Income and Assets Update (MODIA/SA220)
• Business details (MOD F) form. (Where the customer's real estate is used for business purposes a MOD F and a MOD R must be issued)

Note: when a customer is conducting a business from their principal home:

• only assess as an asset the portion used solely for business purposes:
• if part of the home is used for both domestic and business purposes, the assets test exempt status of the customer's principal home is retained, so a MOD R is not required

Procedure ends here until documents returned.

The Rural Property Questionnaire (Q454) is used along with the MOD R. This collects more details from the customer for a third party valuer to accurately value the property.

In most cases, if the property operates as a commercial enterprise, issue the Q454 in addition to the MOD R.

A Q454 is not required to be issued for:

• smaller properties such as hobby farms with minimal farm improvements or bush blocks.
• where the whole property is exempt because it is:
• the principal home, or
• an exempt farm asset

Procedure ends here until documents are returned.

If the customer is receiving a Blind Pension, only issue a MOD R and/or MOD F if they:

• are being assessed for Rent Assistance, or
• have a partner and the partner is not on a means test free payment

In these cases, details are still needed to determine Rent Assistance or the partner's rate.

Procedure ends here until documents returned.

Gifting

If the property has been gifted or sold for less than its value, deprivation may have occurred. For more information, see Assessing deprivation/gifting.

Information needed

If the customer can supply all relevant details of the sale of the home, and value of the property is similar to the monies received from sale, complete updates in one transaction based on their verbal advice.

Verification is only needed if it is a mortgage, capital gain or relevant information could not be supplied verbally.

If the customer has sold only a part share of the property and still owns some of the property, use the appropriate percentage they now own to update REBS.

Note: for overseas real estate, update the Foreign Income and Assets (FID) screen.

Real estate information may need recoding if the customer's relationship status has changed since the Real Estate (RE) screen was last updated.

If the customer:

• is able to provide the information verbally, go to Step 2
• needs to supply more information or verification, go to Step 3
• has supplied documents, go to Step 4

• In Customer First, to update the customer's real estate assets, see Assessing and coding real estate details
• On the Real Estate/Business Identifying (REBI) screen, update the Principal Home field if appropriate. Update the Sold/Gifted/Ceased field with the valid code using field help ('?')
• On the RE screen, code the % Asset Owned, the Current Market Value $ and the Current House and Curt. $ fields as '0'.
  Note: for overseas real estate, update the Foreign Income and Assets (FID) screen
• If the customer was receiving income from the property, code the income as zero on the following fields - Gross Annual Income $ '0', Allowable Income Dedns $ pa '0', Annual Interest $ '0'
• If the customer made a capital gain when they sold their property, no income is assessed. Update any investments or assets purchased from the proceeds of the sale
• Ask for relevant documents (including those showing any mortgage on the property) to be provided within 14 days. See Requesting information (CLK)
• Record the details on a DOC
• Finalise the activity

• For allowance and Parenting Payment customers, issue Additional Income and Assets (MOD iA) form to be returned within 14 days. See Requesting information (CLK)
• For pension customers, issue an Income and Assets Update (SA369) to be returned within 21 days. Issue a MODIA or SA220 income and asset review form See Requesting information (CLK)
• If ownership percentage has changed (for example, a part sale and/or mortgage balance needs adjusting), ask the customer to provide verification within 14 days
• Record the details on a DOC
• Procedure ends here until documents are returned

When the required documents are returned:

• If the sale is already recorded, confirm the information on the documents matches the customer's record. Cancel the scanned activity if one exists
• If the sale was not recorded when first advised because of not enough information, record the sale in Customer Record
• Select the real estate asset from the REBS screen. On the REBI screen, ensure the Principal Home field is coded. Update the Sold/Gifted/Ceased field with the valid code using field help ('?').
• On the RE screen code the Event Date field as the date of event (DOV) and the % Asset Owned field as '0'. and the Current Market Value $ field as '0'
• If the customer was receiving income from the property, code the income as zero on the following fields - Gross Annual Income $ '0', Allowable Income Dedns $ pa '0', Annual Interest $ '0'
• If the customer made a capital gain when they sold their property, no income is assessed. Update any investments or assets purchased from the proceeds of the sale

Procedure ends here.

Link new real estate to a business when it is unavoidable, for example, a non-primary production business where

• there is a liability over all business assets (real estate and other), and
• the value of the net business assets (excluding the real estate) is negative.

If linking is unavoidable, enter the details of the business first then link the real estate to the business record.

Exemptions from the assets test for house and curtilage may apply if

• the business real estate is also the customer's principal home and the customer satisfies the extended land use test, or
• the customer is using part of their principal home solely for the business. In these cases:
• a valuation is not required
• it is not coded on the Real Estate (RE) screen
• use the value of the portion used solely for business, (as listed on a balance sheet or advised by the customer). Code it as a business asset on the Business Details (BUS) screen

Updates are required on the following 3 screens:

• Code the Real Estate/Business Identifying (REBI) screen. See Assessing and coding real estate details. When coding is complete, press [Enter]
• Code the Business Details (BUS) screen. Press [Enter]
• Code the RE screen using the details provided on the MOD R. See Assessing and coding real estate details

For property used for business purposes, code the completed MOD F, see Assessing and coding the Business details for sole traders and partnerships MOD F.

Go to Step 3.

If a customer's land and principal home on the one title is exempt under the extended land use test, a valuation is not required and the customer's estimate of the property value is acceptable.

If the property is already recorded on the customer's record, see Step 2 in Table 4.

For Australian properties

Assess the completed MOD R and update the property on the customer's record, see Assessing and coding real estate details.

Customers who own real estate as 'tenants in common' have their legal share assessed based on the agreed ownership percentage. For example, if a customer owns 40% of the property, use 40% of the whole property value.

For overseas properties

• Record asset values of overseas real estate on the Foreign Income and Assets (FID) screen with REA in the Type: field.
• Do not code overseas property on REBS
• Code the asset value in the relevant foreign currency and the system will convert it to Australian Dollars (AUD)
• The asset value automatically changes each month with variations in exchange rates
• See Foreign income and assets for further details

Real estate within Australia

For information about when a valuation may be required, see Valuation of real estate and other assets at new claim.

Overseas real estate

For more information about when a valuation request may be required, see Valuation of real estate and other asset.

Centrelink International Services (CIS) may accept alternative source documents for overseas real estate instead of a valuation (for example, Italian tax returns).

Do not refer property owned under timeshare arrangements for valuation. For information on assessing and coding timeshares, see Step 1 in Table 6.

A valuation that is higher than a previous valuation, or a customer's estimate, is applied from the first payday after it is received.

When a valuation is lower than a previous valuation, or a customer's estimate, apply the date of effect rules.

Exceptions are when:

• there is evidence the customer deliberately misrepresented details of the asset, the value may be applied from a date earlier than the valuation date
• the customer applies for a formal review of a current valuation. In this case, the review of decision date of effect rules apply

The payday definition is in Section 23 (1) on the References page.

Only raise a debt if a person has deliberately misrepresented the details of the asset. When a debt shell is created due to a property value not being updated before the next payday after the valuation is received, this debt should be waived.

If the customer has a partially built house that is to be assessed as an asset and the property will not become the customer's principal home, a valuation of the fully constructed property may be required on completion.

Procedure ends here.

The legal structure of timeshare arrangements vary widely and can include a share in holiday homes/units, caravan parks, houseboats, etc. Do not request valuations for timeshare assets.

A MOD R is not required as in most circumstances when the customer notifies the sale price or recent sale value it is accepted.

The asset value of a timeshare depends on when it was purchased. If purchased:

• in the last 12 months, use the purchase price
• more than 12 months ago, use the most recent sale price within that timeshare. Customers should be able to obtain this from the timeshare management

A timeshare asset is purchased, sold or its value changes

• If the timeshare is already recorded on the Other Assets (OAS) screen this must be ceased. From December 2015, timeshare in a property is assessed as a managed investment on the Direct Investments (SVDI) screen
• To cease the timeshare assessment on the OAS screen, code the following fields:
• Event Date today's date (the same date is used for coding in the timeshare investment on the SVDI screen)
• Total Asset $ $0
• % Owned Client and % Owned Partner code as '0'
• Source and DOR as appropriate
• To recode the timeshare, see Managed investments - adding a new investment
• Note: any income being assessed from the timeshare investment must also be ceased
• Procedure ends here
• If recording the timeshare for the first time, see Managed investments - adding a new investment
• If the timeshare is already recorded as an investment on the SVDI screen, see Managed investments - adding a new investment

• If the customer was previously a non-homeowner with real estate recorded as an asset, once the property becomes their principal home, it is no longer assessed unless there is excess land that is not exempt as curtilage. Go to Step 3
• If the customer was previously a homeowner and has moved into the property recorded on REBS, the property on REBS becomes the principal home and the previous home becomes an asset, go to Step 7
• If the customer moves out of their principal home, which is recorded on REBS, go to Step 2
• If the customer has sold their previous home, see Sale of principal home
• If the customer has sold their previous principal home and intends to use all or part of the proceeds of sale to renovate and move into a property they own which is recorded on REBS:
• The amount from proceeds of sale intended for renovation is exempt under the assets test if the renovations occur before they move into the new principal home. Once the former REBS coded property is their principal residence, no asset test exemption applies to any proceeds from the sale, see Selling a home
• The new principal home should no longer be assessed unless there is excess land that is not exempt as curtilage. Go to Step 3
• If the customer has sold their home with the intention of buying another, they have the following options:
• have the temporary home exempted from the assets test and the proceeds of the sale of their principal home assessed as an asset. Go to Step 3
• have the proceeds of the sale of their principal home exempted for an initial 12 months and the temporary home still assessed as an asset. Note: from 1 July 2007, the former home exemption may be extended for another 12 months if certain criteria are met. Go to Step 6

If the customer’s previous principal home was being assessed under the assets test, for example the land size is greater than 2 hectares, the full property may be considered an asset under the assets test when they move out.

If the customer has not sold or gifted the property, update the property details from the date the customer vacated to move to their new home:

• REBI screen – change Principal Home: from Y to N
• RE screen
• Curtilage Type: make field blank
• Current House & Curt.$: change to 0

Go to Step 5.

From 1 January 2007, the assets test assessment for the principal home and curtilage was amended to a single title rule. There are 2 curtilage categories used to determine a customer's allowable house and curtilage concession:

• private land use test
• extended land use test

A grandfathered savings provision for real estate may apply.

Do the home and curtilage rules apply to the real estate the customer is moving in to?

• Yes, see Assessing house and curtilage
• No, go to Step 4

If the property is no longer assessable, update the REBI screen as follows:

• Principal Home field
• Sold/Gifted/Ceased field with 'NAA' (no assessable asset value)
• Source and Date of Receipt fields; code as appropriate, then 'C' for correct
• press [Enter] to apply the updates. Pressing [Enter] again navigates to the Real Estate (RE) screen
• on the RE screen:
• code the Date of Event field as the date of event (DOV)
• code the % Asset Owned field as '0' and the Current Market Value $ field as '0'
• if the customer was receiving income from the property, update following fields:
• % Income Owned '0'
• Gross Annual Income $ '0'
• Annual Interest $ '0'
• Allowable Income Dedns $ pa '0'
• Source and DOR is already displayed, code 'I' to insert

Finalise the assessment.

• If applicable, change the address on the Address Details (AD) screen. For more information, see Changing address
• Update the Home Ownership field on the Accommodation Circumstances (AC) screen to 'HOM - fully owns home'
• If customer is sharing with another person, who is not a close family member or partner, send a Relationship details (SS284) or Relationship Details - Separated under one roof (SS293), if required
• If applicable, code the full proceeds of the sale on the Savings Summary (SVS) screen as:
• Direct Investments (SVDI), or
• Savings Bank Accounts (SVP)
• Note: ensure the proceeds are only recorded once, so the asset is only assessed once
• Update the Source and DOR fields as appropriate
• Finalise the assessment
• Record details on a DOC

Procedure ends here.

The portion of the proceeds of sale, which the customer intends to use to purchase, build, rebuild, repair or renovate a new principal home are an exempt asset for up to:

• 12 months from the date of sale for sales before 1 January 2023, with an extension of up to 24 months total in some circumstances
• 24 months from the date of sale for sales from 1 January 2023 onwards, with an extension of up to 36 months total in some circumstances

Most of the time, this date will be the property settlement date, and the lower deeming rate is applied when the funds are invested in financial assets. For further details see Sale of principal home.

The asset test exemption may be extended for up to an additional 12 months if the customer has a continuing intention to apply the proceeds of the sale to purchase, build, rebuild, repair or renovate a new principal home and have:

• made reasonable attempts to obtain a new principal home, and
• been making those attempts within a reasonable period (i.e., 6 months) after selling the principal home, and
• experienced delays beyond their control in obtaining a new principal home

All of the above criteria must be met for the customer to gain an extended principal home sale proceeds exemption For further details see Sale of principal home.

Update the customer's record

• Change the address on Address Details (AD) screen . For more information, see Changing address
• If the customer is sharing with another person who is not a close family member or partner, send an SS284 or SS293, if required
• Ensure the AC screen has been updated. See Sale of principal home.
• Code the proceeds of sale and the exemption. See Sale of principal home.

Any money intended for purchasing land or building another home

Land already owned (outright or mortgaged) by the customer on which they intend to build a new principal home, may be exempt from the assets test once the principal home sale proceeds have been received.

If the customer uses the proceeds of sale to purchase a block of land on which they intend to build a new principal home, the land may be exempt from the assets test for up to 12 or 24 months depending on the date of sale.

The total exempt asset value must not exceed the sale price of the old principal home.

• If a new block has been purchased:
• Adjust the balance of the proceeds of sale with the purchase price of the block of land see Sale of principal home
• Record all details in a DOC
• If a block of land is already owned and no longer assessable:
• select the real estate asset from the REBS screen
• on the Real Estate/Business Identifying (REBI) screen, update the Sold/Gifted/Ceased field with 'NAA'
• on the Real Estate (RE) screen, code the % Income Owned field as '0', code the % Asset Owned field as '0' and the Current Market Value $ field as '0'
• Update the Source and DOR fields as appropriate
• Finalise the assessment
• Record details on a DOC
• If the customer was receiving income from the block of land, zero the income:
• % Income Owned - '0'
• Gross Annual Income $ - '0'
• Annual Interest $ - '0'
• Allowable Income Dedns $ pa - '0'
• Update the Source and DOR fields as appropriate
• Finalise the assessment
• Record details on a DOC

Procedure ends here.

• Update the real estate asset if the property is no longer assessable:
• select the real estate asset from the REBS screen
• on the Real Estate/Business Identifying (REBI) screen, update the Sold/Gifted/Ceased field with 'NAA'
• Code the Real Estate (RE) screen:
• Event Date field as the date of event (DOV)
• % Income Owned field as '0', code the % Asset Owned field as '0' and the Current Market Value $ field as '0'
  Note: for overseas real estate, update the Foreign Income and Assets (FID) screen
• If the customer was receiving income from the property, code the income as zero in the following fields:
• % Income Owned '0'
• Gross Annual Income $ '0'
• Annual Interest $ '0'
• Allowable Income Dedns $ pa '0'
• Change the address on the Address Details (AD) screen. For more information, see Changing address
• This property is now an assessable asset. Issue a MOD R for details of the previous home, to be returned within 14 days. See Requesting information (CLK). Upon receipt of the completed MOD R, update property details on the customer's record
• If the customer is sharing with another person, who is not a close family member or partner, send an SS284 or SS293, if required
• Update the Source and DOR fields as appropriate
• Finalise the assessment
• Record details on a DOC