Downsizing your home and releasing equity can potentially impact your Age Pension or Commonwealth Seniors Health Card in Victoria, and changes are scheduled for 2027. As of December 2025, the current rules allow eligible homeowners to make a one-off, post-CGT contribution of up to $300,000 from the sale of their principal residence, and a further $300,000 for a spouse, which isn’t assessed as an asset for pension purposes.
In 2026, the process for Melbourne sellers considering downsizing will likely involve careful planning around these asset test thresholds. Currently in Melbourne, the median dwelling value is around $823,495, meaning many properties in the Eastern Suburbs – particularly in areas like Balwyn and Doncaster – will yield significant equity upon sale. Fletchers’ comprehensive property appraisals help homeowners understand their potential financial position. The sale process itself typically runs for 4-6 weeks, including marketing campaigns costing $3,000-$8,000, and a settlement period of 30-60 days. It’s important to note that Centrelink assesses assets at the time of application, so timing the sale and contribution strategically is key. We often see clients preparing their homes for sale with styling ($2,000-$8,000) and minor renovations to maximise their property’s value.
Understanding how the sale of your property interacts with Centrelink’s rules is crucial when considering downsizing in 2026, and beyond with the changes planned for 2027.