This can benefit people who:
- have a former home that has a high market value
- have a former home that will generate sufficient rental income to assist with aged care expenses
- will receive a reduced or cancelled age pension when the former home becomes assessable two years after entering aged care
- Retaining former home for two years after entering aged care may assist with maintaining social security/DVA entitlements as asset value exempt (assessed as homeowner)
- Selling former home two years after entering aged care may assist with meeting expenses – as age pension may reduce due to market value of former home becoming assessable (assessed as non-homeowner)
- Retaining former home for two years after entering aged care may assist in reducing aged care fees – as capped value of former home is assessable (unless occupied by protected person)
Things to be aware of:
- Two years after permanently entering aged care, market value of former home assessable for social security (assessed as a non-homeowner)
- Rental income assessable for social security and aged care fee purposes unless eligible for exemption
- Former home may need repairs/renovation before can be rented
- Rental income may fluctuate i.e. periods where its vacant
- Ongoing costs e.g. real estate agency fees, accounting costs, building and landlord insurance, council rates, water rates, repair costs, land tax (if applicable) etc.
- Rental income assessable for tax purposes. Persons may have to lodge tax return.
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