How To Avoid Selling Your House To Pay For Care
Entering a care home does not automatically mean you must immediately sell your property. Whether your home is included in a local authority financial assessment depends on your circumstances, who still lives there and whether any property disregards apply.
There are also legitimate planning options that may help protect your position or delay a sale. However, simply giving your home away or moving it into a trust to avoid future care fees can create serious problems.
Will You Have To Sell Your Home To Pay For Care?
Not necessarily.
For the 2026/27 financial year in England, the upper capital limit for local authority care funding remains £23,250, while the lower capital limit is £14,250. If assessable capital is above the upper limit, a person will generally be responsible for the full cost of their care.
However, a home is not automatically counted in every assessment.
The Care and Support Statutory Guidance sets out circumstances where the value of a person’s main or only home must be disregarded.
This means the first step is to establish how the rules apply to your individual circumstances before assuming that the property must be sold.
When Can Your Property Be Disregarded?
A property may be left out of the financial assessment where certain qualifying people continue to occupy it as their main home.
This can include:
A spouse, civil partner or qualifying partner
A qualifying relative aged 60 or over
A child under 18
Certain incapacitated relatives
For example, if one spouse permanently enters residential care while the other continues living in the family home, the property will generally be disregarded while the qualifying spouse remains there.
Local authorities may also have discretion to disregard property in some other circumstances.
What Is The 12-Week Property Disregard?
When someone first moves permanently into a care home, their main or only home may be disregarded for the first 12 weeks if the relevant conditions are met.
This is designed to prevent an immediate decision about selling the property and gives the person and their family time to consider longer-term funding arrangements.
At the end of the 12 weeks, the property may then be included in the financial assessment unless another disregard applies.
Could A Deferred Payment Agreement Help?
A Deferred Payment Agreement, or DPA, may allow an eligible homeowner to avoid selling their property immediately.
Under a DPA, the local authority contributes towards care costs and the deferred amount is normally secured against the property. The debt is then repaid later, usually when the property is eventually sold or after the person’s death.
A DPA does not mean the care is free. Interest and administration charges can apply, but it may give families valuable breathing space.
You can read more about the current rules in the Government’s Deferred Payment Agreement guidance.
Can You Give Your House To Your Children To Avoid Care Fees?
This is where families need to be careful.
Giving your home to your children does not automatically remove it from consideration.
Local authorities can investigate deprivation of assets, where someone deliberately gives away or reduces assets in order to pay less towards their care.
If the authority decides deliberate deprivation has taken place, it may assess the person as though they still owned the asset. This is sometimes called notional capital.
Transferring your home can also create wider risks. Once the property has been given away, you no longer control it in the same way, and the recipient’s financial or family circumstances may affect what happens to it.
Does The Seven-Year Rule Protect Your Home From Care Fees?
No.
The well-known seven-year rule relates to Inheritance Tax, not care-fee assessments.
There is no equivalent rule stating that if you give your property away seven years before entering care, it will automatically be ignored.
Care-fee planning and Inheritance Tax planning are separate areas with different rules. If you are considering making a substantial lifetime gift, it is important to understand both sets of consequences.
Our Lifetime Inheritance Tax Planning page explains the tax-planning side in more detail.
Can A Trust Protect Your Home From Care Home Fees?
Trusts can be useful estate-planning tools, but they should not be treated as a guaranteed way of avoiding care charges.
A trust may be appropriate for genuine reasons such as:
Providing for a spouse or family member
Protecting vulnerable beneficiaries
Controlling how assets are inherited
Planning for children from different relationships
Managing family wealth over time
However, if a trust is created mainly to prevent assets being taken into account for care fees, the local authority may consider whether deprivation of assets has occurred.
If you are considering transferring your home into a trust, take advice first. You can learn more about legitimate trust planning on our Estate Planning Trusts page.
What Planning Can You Do Before Care Is Needed?
The most useful planning is usually done before a crisis arises.
Depending on your circumstances, this may include reviewing:
How your property is legally owned
Whether your Will still reflects your wishes
Whether a trust is appropriate
Your wider estate and Inheritance Tax position
Who would manage your finances if you lost capacity
How future care may be funded
A Lasting Power of Attorney can also be important. A Property and Financial Affairs LPA allows trusted attorneys to manage financial matters if you later become unable to do so yourself.
Your Will and wider estate planning should also be reviewed together rather than in isolation.
Common Mistakes To Avoid
Be cautious of claims such as:
“If I give the house to my children, the council cannot count it.”
“If I survive seven years, the property is protected.”
“Any trust will keep my home out of a care-fee assessment.”
“Everyone entering a care home must sell their property.”
These statements are not universally correct.
Care-fee assessments depend on personal circumstances, ownership arrangements, who lives in the property and why any previous transfers were made.
Frequently Asked Questions
Do I Have To Sell My House To Pay For Care?
Not automatically. Your property may be disregarded in some circumstances, and a Deferred Payment Agreement may be available.
Can I Give My House To My Children Before Going Into Care?
You can transfer property, but if the purpose is to reduce care charges, the local authority may consider whether there has been deliberate deprivation of assets.
Can A Trust Protect My Home From Care Fees?
A trust may be useful for legitimate estate-planning reasons, but it is not a guaranteed way to avoid care charges.
What Is The 12-Week Property Disregard?
It is a temporary period during which a qualifying person’s main or only home is excluded from the financial assessment after entering permanent residential care.
Is My Home Counted If My Spouse Still Lives There?
Where a qualifying spouse or partner continues to occupy the property as their main home, its value will generally be disregarded.
Get Advice Before Making Changes To Your Property
The safest approach is not to look for a last-minute way to move assets out of reach. It is to understand the rules early and make decisions for genuine legal, family and financial reasons.
At MDW Solicitors, we advise individuals and families in Gerrards Cross and surrounding areas on Wills, trusts, wealth management, Lasting Powers of Attorney and wider estate planning.
If you are considering gifting property, changing ownership or creating a trust because you are concerned about future care costs, speak to MDW Solicitors before taking action.
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