What Happens to My House If I Go Into a Care Home?

Yes, your house could be used to pay for care home fees — but not always, and not immediately. The rules are more nuanced than most people think, and there are legitimate ways to protect your property.

This is one of the most common fears we hear from people planning their estates. Let's cut through the confusion and explain exactly what happens, when, and what you can actually do about it.

The Quick Answer

Your house may be included in the financial assessment for care home fees if:

• You're the sole owner and no one else lives there
• Your total assets exceed £23,250
• You need residential (not just home) care

Your house is ignored in the assessment if:

• Your spouse or civil partner still lives there
• A relative over 60 lives there
• A disabled relative lives there
• You're only receiving care at home

But your specific situation matters enormously. That's why many people ask our estate planners about their personal circumstances — every family is different.

How the Financial Assessment Works

When you need care, your local authority carries out a financial assessment to determine whether you'll pay for your own care (self-fund) or receive council support.

The Thresholds (2024/25)

Your Assets	What Happens
Over £23,250	You pay the full cost of care
£14,250 - £23,250	You contribute from savings, council tops up
Under £14,250	Council pays (but you contribute from income)

Your home is usually your biggest asset. So whether it's included makes a massive difference.

When Your House IS Included

Your property counts toward the £23,250 threshold when:

1. You move into permanent residential care — not temporary or respite care
2. No qualifying person lives there — more on this below
3. The 12-week disregard has ended — you get 12 weeks before your home is counted

Once included, you're expected to use the value to pay for care. This doesn't mean you must sell immediately — there are options like deferred payment agreements.

When Your House IS Protected

The property is disregarded (not counted) if any of these people still live there:

• Your spouse or civil partner
• Your ex-partner (if they're a lone parent)
• A relative aged 60 or over
• A relative who is disabled or incapacitated
• A child under 18 whom you're liable to maintain

Important: Adult children under 60 who are fit and healthy do NOT protect the property, even if they've lived there for years.

Common Protection Strategies (And Which Actually Work)

Strategy 1: Giving the House Away

The idea: Transfer your home to your children so it's no longer yours.

The reality: This is extremely risky. If you give away assets specifically to avoid paying care fees, this is called deliberate deprivation of assets. The local authority can:

• Still count the asset as if you own it
• Pursue your children for the fees
• Go back many years to investigate transfers

There's no time limit on how far back they can look. A gift made 10 years ago can still be challenged if the motive was avoiding care fees.

When it might work: If you genuinely gave the property away for other reasons, with no care needs foreseeable at the time, it may be acceptable. But proving your intention is difficult.

Strategy 2: Tenants in Common with a Trust

The idea: Own the property as tenants in common (not joint tenants), and put your half into a trust on death so it's protected when the surviving spouse needs care.

The reality: This can work for married couples. Here's how:

1. Change ownership from joint tenants to tenants in common (50/50)
2. Each spouse's will puts their 50% into a trust on death
3. The surviving spouse can live in the property
4. When the survivor needs care, only their 50% is assessed

This is legitimate planning, not deprivation. But it must be set up properly with legal advice.

Strategy 3: Deferred Payment Agreement

The idea: The council pays your care fees now, and takes the money from your estate after death.

The reality: This works well. It lets you:

• Keep your home unsold while you're alive
• Avoid the stress of a forced sale
• Have the debt repaid from your estate later

Interest is charged (currently around 0.15% above the market gilts rate), but it's much better than a rushed sale. You must still pay something toward your care from income.

Strategy 4: Letting the Property

The idea: Rent out your home while in care — use the income for fees but keep the asset.

The reality: Partially works. The rental income counts toward your care fees, and the property value is still assessed. But it can:

• Preserve the property for inheritance
• Generate income to help with fees
• Buy time before any sale decision

What About Putting My House in Trust?

This is where people get confused. Putting your house in trust while you continue to live in it doesn't protect it. This is a "gift with reservation of benefit" and is caught by:

• Inheritance tax rules (the asset stays in your estate)
• Care fee rules (local authority can still count it)

However, trusts CAN work as part of a properly structured plan — particularly:

• Life interest trusts between spouses
• Nil rate band discretionary trusts in wills
• Trusts where you don't retain any benefit

The key is getting professional advice on your specific circumstances.

The 12-Week Property Disregard

When you first move into permanent residential care, your property is ignored for the first 12 weeks. This gives you time to:

• Decide whether care is permanent
• Arrange finances
• Consider options like deferred payment

During this time, the council should help fund your care as if you didn't own the property.

What About NHS Continuing Healthcare?

If your needs are primarily health-related (not social care), you may qualify for NHS Continuing Healthcare (CHC). This is:

• Fully funded by the NHS
• No means test — your assets don't matter
• Available in care homes or your own home

Qualifying isn't easy — you need significant health needs. But it's always worth checking if you're eligible.

What You Should Actually Do

If Care Is Years Away

1. Review your property ownership — are you joint tenants or tenants in common?
2. Update your wills — consider trust provisions for the surviving spouse
3. Set up Lasting Powers of Attorney — so someone can manage if you lose capacity
4. Keep records — document any gifts and the genuine reasons for them

If Care Is Needed Soon

1. Get a financial assessment — understand exactly where you stand
2. Ask about deferred payment — you have a right to this in most cases
3. Check NHS Continuing Healthcare eligibility
4. Get specialist advice — before making any decisions about your property

Why Professional Advice Matters Here

Care fee planning is one area where DIY can be dangerous. The wrong move can:

• Result in deliberate deprivation findings
• Create family disputes
• Trigger unexpected tax bills
• Leave you without resources you need

Every situation is different. Your health, family circumstances, property value, other assets, and timing all matter.

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