Last amended: Proceeds from sale of home


Where a person sells their principal home, the sale proceeds received are assessed as follows:

  • the portion intended to be applied in acquiring a new principal home, may be a disregarded asset of the person for up to twelve months (or up to 24 months if exemption extended), and
  • the portion intended to be used for other purposes (ie not to be used in acquiring a new principal home) are immediately an assessable asset.
Assessment of exempt home sale proceeds

If the person intends to use the proceeds from the sale of their former principal home to acquire a new principal home:

Disregarded asset

For the home sale proceeds to be treated as a disregarded asset, the person must intend to:     

  • acquire a new principal home within twelve months of the sale of the previous home, and
  • apply the whole or a part of the proceeds in acquiring the new principal home.

Home sale proceeds that are being treated as a disregarded asset, can remain disregarded when proceeds are used for the incomplete new principal home. For example, when part of the proceeds are used to buy land where the home will be built or to pay for progressive building costs.

If the person intends to build their new principal home on vacant land they already own, then that land and any partially completed buildings may be considered as part of their disregarded assets. However, the total disregarded asset value cannot exceed the amount received from the home sale, eg remaining proceeds to be used for new home  +  land value  +  buildings = home sale proceeds received.

Proof of intention

If it is not certain that a pensioner intends to use the sale proceeds to acquire a principal home within twelve months, evidence should be sought. Documents that indicate an intention to acquire a residence include: a contract for purchase of real estate, a building contract, a letter from a solicitor providing conveyancing services, a written statement from a real estate agent, or a statutory declaration by the pensioner.

Other factors to be considered will be the term of any temporary accommodation agreement entered into by the pensioner (whether it is of no more than 12 months' duration), and accessibility of the home proceeds if invested (a long-term fixed deposit might indicate that there is no real intention of using the funds to acquire a home within twelve months).

Example of home sale proceeds exemption

A pensioner sells their principal home for $300,000 and intends to build a new principal home for $250,000. The $250,000 portion that they intend to use for the new home is a disregarded asset for up to twelve months from the home sale date. The remaining $50,000 is immediately assessed as a financial asset. However, the entire $300,000 is assessed for deemed income.

If towards the end of the twelve months exemption, the home is not yet completed due to delays beyond the control of the pensioner, an extension of up to an additional twelve months may be possible.    

Delayed occupancy

The exemption of the proceeds as a disregarded asset may be retained for those periods where the person is prevented from immediately occupying the new principal home. For example, occupancy may be delayed by an existing lease, or if the vendor needs to remain in residence for a period. However, if the continued exemption period would exceed 24 months from the date the former home was sold, please seek advice from Policy Advisings Income Support,

Assessment of home sold and/or purchased on terms


If a person sells their principal home on terms and purchases another residence on terms, only the balance due from the sale which is to be applied to the purchase of the new residence is an exempt asset. The exemption applies for the duration of the terms under respective agreements. Neither the standard twelve-month exemption period, nor the extension applies to these cases.

Assessment of deprivation of home

Where a person gifts their principal home, the value of the property must be assessed according to the deprivation provisions. No period of exemption will apply.