How does the Age Pension assets test treat investment property? It counts it, and the income test counts the rent. Some property investors assume they will never qualify, and some are right. Others are surprised to find a part pension is open to them, or that a change to their portfolio would change their pension.
Two tests, and the lower result
Services Australia works out the Age Pension under two tests, the assets test and the income test, and pays the lower of the two results. Investment property shows up in both.
The assets test
The home you live in is not counted. An investment property is, at its market value less any loan secured against it. For every $1,000 of assessable assets above the full pension threshold, the pension falls by $3 a fortnight. The thresholds at 20 September 2026 for homeowners:
| Homeowner | Full pension up to | Part pension stops at |
|---|---|---|
| Single | $333,000 | $745,750 |
| Couple, combined | $499,000 | $1,121,000 |
Being asset rich can mean no pension at all, even when the properties produce little income. That is the asset rich, cash poor position seen from the pension’s side.
The income test
Rent counts as income, but not all of it. In general the income test counts the rent less the costs of earning it, including loan interest. A heavily geared property may add little to your assessed income; one owned outright adds more.
A retired couple on a part pension own one property outright and one with a large loan. They pay $100,000 off the loan from savings. The property’s net value rises by $100,000 and their savings fall by the same amount, so the assets test barely moves. Their deemed income and their interest bill both fall. Whether they come out ahead depends on the rate.
Before you change anything
Selling a property, paying down a loan or moving money into super each changes how the two tests see you. Paying down a loan moves money from one counted asset to another. Selling turns a property into money that is counted too, and earns deemed income. A change that looks right on its own can lower your pension. That is worth seeing before the change, not after.
A part pension is still a pension. For a property investor on a part pension it is part of the income floor, and knowing how your property is counted is how you see that floor clearly.
The two tests touch every decision you make about your property, and the effect is easy to miss until a payment changes. To see the pension effect before you act, book a first conversation. It costs nothing.
Nicholas Lockhart
Thresholds at 20 September 2026; they change during the year. Services Australia can confirm your own position.
Source: Services Australia, Assets test for Age Pension (thresholds at 20 September 2026).