Your principal home is generally exempt from the Age Pension assets test while you live in it. If you sell, the proceeds may count as assets and financial income. Here's the trade-off — and a rule that may help.
Your principal home is generally exempt from the Age Pension assets test while you live in it — its value is not counted like savings are. Special circumstances can change the assessment. If you sell, the proceeds may become assessable assets and financial assets can also be subject to deeming.
Downsizing frees up cash, but the proceeds can affect the Age Pension assets test. For a homeowner couple, the current assets-test full-rate threshold is $499,000 and the cut-off is $1,121,000 (outside the home). The income test and other eligibility rules may also reduce or remove a payment.
Grace period: proceeds meant for a new home get a temporary exemption (currently up to 24 months) while you're between houses.
If you're 55 or over and sell a home you've owned for 10+ years, you can put up to $300,000 each into super — on top of normal contribution limits, no work test.
Important catch: money in super still counts in the pension assets test once you're pension age. Downsizer isn't a pension dodge — it's a way to move sale proceeds into the tax-friendly super system. Whether it helps your pension depends on where you sit against the limits.
RetirePath's housing options let you test "sell at 65 and rent" vs "downsize and buy" vs "stay put" — including what each does to your pension year by year. Try it with your real numbers, no sign-up needed.
Figures reflect the 2026–27 rules year (Age Pension rates as at 20 September 2026) — the same figures the calculator uses. Reviewed October 2026. This is general guidance, not financial advice — talk to Services Australia's free Financial Information Service before selling.