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Homeowner & Non-Homeowner where Home is owned by a Private Company or Trust

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Last amended: 20 March 2012

Individual has an interest in a controlled private company or trust

Situations where an individual is considered to have an interest in a controlled private company or controlled private trust include where they are:

  • an attributable stakeholder (for example director of a private company, appointor or trustee of a private trust), or
  • a non-attributable stakeholder (for example minority shareholder of a private company or beneficiary of a private trust).
Homeownership and a sole attributable stakeholder

If the principal home of a sole attributable stakeholder or members of a couple who are the only attributable stakeholders is part of the entity assets which they control, then the value of their home (and curtilage) is an exempt asset (provided the individuals can demonstrate that they have reasonable security of tenure in the home).    

Homeownership and multiple attributable stakeholders

If the entity assets include the principal homes of multiple attributable stakeholders then the value of the principal home (and curtilage) of each stakeholder is an exempt asset for that stakeholder only(provided the individuals can demonstrate that they have reasonable security of tenure in the home). The formula for calculating the asset attribution amount of an individual (where there are no liabilities against the home) is as follows:

(total entity assets less the value of principal home) x asset attribution percentage

However, where liabilities are involved, the value of liabilities secured against the assets and associated allowable income deductions for interest payable are reduced in line with the exemption given for the principal home.    

Shared equity housing

Some organisations provide accommodation through a company structure for particular groups, such as the elderly or people with a disability, on a shared equity basis. The homeowner status of individuals living in shared equity housing is assessed using the provisions for special residences. The amount paid for shares in the company operating the housing is regarded as being the person's entry contribution amount.    


According to section 52ZZJ of the VEA, a person is an attributable stakeholder if a company or trust is a controlled private company or trust in relation to the individual unless the Commission determines otherwise.

 

 

Trustee has two meanings depending on the context, (i) and (ii).

(i) a person who looks after someone else's affairs

According to section 202 of the VEA, a trustee is a person appointed by the Commission to administer the financial affairs of a pensioner who may be incapable of managing their own affairs for reasons such as:

  • age,
  • infirmity,
  • ill health, or
  • improvidence.

These criteria include circumstances where a pensioner has a psychiatric disorder or a mental illness as a result of alcohol or drug addiction.

A trustee can be appointed, with or without the consent of the pensioner and once appointed, a trustee has full control of the pension payment.

(ii) a person responsible for administration of a trust

According to section 52ZO of the VEA, trustee has the same meaning as in the Income Tax Assessment Act 1997.

 

 

The principal home has the meaning given by subsection 5LA(1) of the VEA and subsection 5LA(2) of the VEA. The principal home of a person is generally the place in which they reside. In certain circumstances, however, the principal home of a person can be the place in which they formerly resided. The following property is regarded as part of the principal home.

  • the residence itself (e.g. house, flat, caravan),
  • permanent fixtures (e.g. stoves, built-in heaters, dish-washers, light fittings and affixed carpets),
  • [glossary:curtilage:DEF/Curtilage] (i.e. two hectares or less of private land around the home where the private land use test has been satisfied, or all land held on the same title as the person's principal home where the extended land use test has been satisfied), or
  •       any garage, shed, tennis court or swimming pool used primarily for private purposes provided it is on the same title as the principal home.

 

 

According to Section 5E(2) of the VEA a person is a member of a couple, if they are:

  • legally married to another person and is not living separately and apart from the other person on a permanent basis; or
  • living in a prescribed registered relationship with the other person (whether of the same sex or a different sex) and is not living separately and apart from that other person on a permanent basis; or
  • all of the following conditions are met:
  • living with another person, whether of the same sex or a different sex;
  • not legally married to that person;
  • in a de facto relationship with that person; and
  • not in a prohibited relationship

The term “partnered” is also commonly used.

An entity means any of the following:

an individual,

a company,

a trust,

a business partnership,

a corporation sole,

a body politic.

Control includes control as a result of, or by means of, trusts, agreements, arrangements, understandings and practices, whether or not having legal or equitable force and whether or not based on legal or equitable rights.

Curtilage is the land adjacent to the exempt principal home.  A certain amount of curtilage is disregarded for the assets test.. The amount of curtilage that is exempt depends on whether the private land use test described in section 5LA(3) of the VEA, or the extended land use test described in section 5LA(4) of the VEA, is satisfied. Under the private land use test, up to two hectares on the same title as the principal home may be exempt. Under the extended land use test, all land on the same title as the principal home may be exempt.

 

 

An exempt asset is one that is disregarded when calculating the value of a person's assets under the assets test.  Examples of exempt assets include:

For a full legislative definition see section 52 of the VEA.

 

 

If the individual is an attributable stakeholder of the trust or company, the individual's asset attribution percentage in relation to the trust or company is:

  • 100%, or
  • a lower percentage if the Commission determines otherwise.

 

 

A person is a homeowner if he or she has a right or interest, which gives reasonable security of tenure in the principal home. A person is also considered to be a homeowner if they have sold their home in the previous 12 months and intend to use part or all of the proceeds to purchase another home.

According to subsection 5MC(2) of the VEA a special residence is:

  • a retirement village; or
  • a granny flat; or
  • a sale leaseback home.