Will I Lose My Age Pension If I Sell My Home?
Selling your home in retirement can feel overwhelming — especially if you’re worried it might affect your Age Pension.
It’s a very common question we hear:
“If I sell my home, will Centrelink take my pension away?”
The short answer is: not necessarily.
But there are important rules you need to understand before you make any decisions.
Your Home and the Age Pension: The Basics
If you are a homeowner, your principal home is exempt from the Centrelink assets test.
That means:
The value of your home does not count as an asset
It doesn’t affect your Age Pension while you live in it
However, things change once you sell your home.
What Happens When You Sell Your Home?
When you sell your home, the money you receive (the sale proceeds) does become assessable by Centrelink — but not immediately in all cases.
Temporary Exemption Period
Centrelink allows a temporary exemption for sale proceeds if:
You intend to use the money to buy, build, renovate, or repair another home
During this time:
Up to $200,000 of the sale proceeds can be exempt from the assets test
The exemption generally lasts for up to 12 months
In some circumstances, it can be extended to 24 months
This means you may be able to sell your home without losing your pension straight away, as long as the funds are being used for another home.
What If I Don’t Buy Another Home?
If you sell your home and:
Move into rental accommodation
Move in with family
Keep the money as cash or investments
Then the full sale proceeds will usually:
Count as an assessable asset
Be deemed to earn income under Centrelink’s income test
This can lead to:
A reduction in your Age Pension
Or, in some cases, loss of entitlement altogether
Downsizing: Does It Affect the Pension?
Downsizing can still be a good option — but it needs careful planning.
For example:
Selling a $1 million home and buying a $600,000 home may leave $400,000 assessable
That extra money could reduce your pension under the assets test
Some people may also consider:
Contributing sale proceeds to superannuation (downsizer contributions)
Using funds for approved home-related purposes
Each option has different Centrelink consequences.
Timing Matters More Than Most People Realise
When you sell your home, Centrelink will look at:
When the sale happened
Where the money is held
What it is being used for
Whether you’ve informed Centrelink promptly
Poor timing or incorrect reporting can result in:
Unexpected pension reductions
Overpayments
Stressful reviews or debts
Do I Need to Tell Centrelink If I Sell My Home?
Yes. You must notify Centrelink as soon as possible after the sale.
Failure to report changes can lead to:
Overpayments
A Centrelink debt
Possible penalties
Should You Get Advice Before Selling?
For many retirees, selling the family home is the largest financial decision they’ll ever make.
Getting the right advice before selling can:
Help protect your Age Pension
Avoid costly mistakes
Reduce stress and uncertainty
How We Can Help
At AgePensionServices, we help clients understand:
How selling a home will affect their pension
What Centrelink exemptions may apply
The best way to report changes correctly
How to avoid pension reductions where possible
Every situation is different, and general information online doesn’t always reflect your personal circumstances.
If you’re considering selling your home and are concerned about your Age Pension, getting personalised guidance can make all the difference.