Property other than where you are living

Property that you own, other than where you live, counts as savings when means-tested benefits are calculated. This means that such property needs to be valued and an amount entered into the calculator.

The valuation to enter

For the purposes of calculating the amount of that property which counts as capital, you should take the current market value ('surrender value') of the property, and reduce the amount by 10% if there would be a cost involved in selling the property. This is because the value of capital taken into account in the means test is reduced by 10% to cover any expenses involved in selling.

You should then deduct from the remaining amount any debts secured on the property such as a mortgage. The amount left is your capital to be taken into account when calculating your means-tested benefits. If there are no selling costs, and no debts secured, then the entire amount is counted as capital.

Property that can be ignored

As well as your main home which is ignored completely, there are some other cases where the value of property can be disregarded (ignored) from a means tested benefit calculation for a period.

In the case of a property for sale it may be disregarded for 26 weeks from the date the property was put for sale, or such a longer period as is reasonable.

In the case of a property purchased that you intend to live in as your main home, the value can be ignored for 26 weeks from the date of purchase, or such longer period as is reasonable in the circumstances to enable you to obtain possession and begin living in the property.

Where essential repairs or alterations are required in order to render a property fit for occupation, the value can be ignored for 26 weeks beginning from the date you first take steps to effect those repairs or alterations, or such longer period as is necessary to enable those repairs or alterations to be carried out.

In particular cases the value of property can be disregarded (ignored) on a long term basis. For example, the capital value of your former home can be disregarded from a means tested benefit calculation if:

• your former home is occupied by a relative who is incapacitated or over Pension Credit qualifying age
• your former home is occupied by your former partner who is a lone parent,

In the cases above the capital value is disregarded for as long as it is occupied by the relative or former partner (while they are a lone parent). 

There are other examples of instances where capital can be disregarded (ignored) so please seek advice if you have any questions about whether land or property you own should be entered here.

Joint capital

Any capital you own jointly with other people will normally be divided equally between the joint owners. For example, if you and your daughter have a joint property with equity of £18,000, you will be assessed as owning £9,000 of it.