Q: I’m a pensioner with one investment property in Tasmania, which I sold a month ago been sell out. My question is how capital gains is calculated for a pensioner? I don’t know anything about this, so could you please give me some information to help me prepare for the next financial year.
We are not specifically a tax site or Age Pension site, but I can point you in the right direction.
Here are some links to assist you.
- Centrelink – Information you need to know about your claim for (Age Pension / Pension Bonus Scheme)
- FAHCSIA – Investing for your retirement
Generally speaking, an investment property is assessed under the Age Pension assets test, and any net rental income received is assessed under the income test. As I understand, if an investment property is sold, then the net proceeds are still counted under the assets test, and if the proceeds remain as cash or other type of financial investment (such as term deposit) then such an asset will be deemed to earn a certain rate of return for the purposes of the income test. The capital gains tax rules are the same whether an individual is under Age Pension age or over Age pension age, although the amount counted for the assets test for a particular year (e.g. before tax is paid on the gain) will need to be confirmed with Centrelink
Note that any Age Pension issues need to be verified with Centrelink, and any tax issues need to be verified with your accountant or the ATO.
