Can You Avoid Selling Your Home to Pay for Care?

Yes in many cases. Whether your home is included in the financial assessment for care at all depends on who lives there and how your care is arranged. Even where the property is assessed, there are legal routes that allow you to delay or avoid a sale entirely. This guide explains each of them clearly.

Does going into a care home mean I have to sell my house?

No. Selling your home is not automatic or mandatory. Several legal protections and funding arrangements can mean your home is either excluded from the financial assessment entirely, or the sale can be delayed indefinitely through a Deferred Payment Agreement.

The starting point is understanding when your home is and is not counted as part of your assets.

When is your home excluded from the financial assessment?

Under the Care Act 2014 and the Care and Support (Charging and Assessment of Resources) Regulations 2014, your property must be disregarded meaning excluded from the means test. If any of the following people are living there at the point you move into care:

Your spouse or civil partner, regardless of their age or the property's value
A relative aged 60 or over
A disabled or incapacitated relative
A dependent child

If your spouse remains in the family home, the property is excluded permanently for as long as they continue to live there. The value of the property does not matter. This is one of the most significant and underused protections in the care funding system, and it applies regardless of whether you jointly or solely own the home.

If a qualifying relative occupies the property, the local authority also has discretion to apply a disregard in cases that fall outside these mandatory categories, though this is not guaranteed.

Our article on protecting your home and assets as a spouse explains the spousal protections in more detail.

What is the 12-week property disregard?

Even where no qualifying person lives in the property, the value of your home is automatically excluded from the financial assessment for the first 12 weeks of a permanent care home placement, provided your other capital is below £23,250.

This 12-week period is intended to give you time to:

Consider whether to rent or sell the property
Arrange your longer-term finances
Apply for a Deferred Payment Agreement

It does not require any action to trigger, the disregard applies automatically during a care needs assessment once the council is notified of a permanent move into residential care.

What is a Deferred Payment Agreement?

A Deferred Payment Agreement (DPA) is a formal arrangement under the Care Act 2014 in which the local authority pays your care home fees on your behalf, and recovers the money from your estate after you pass away or when your property is eventually sold.

A DPA means you do not need to sell your home during your lifetime to fund your care. The debt accumulates over time, secured against the property by way of a legal charge registered by the council. Interest is charged on the outstanding balance, but at a rate capped by national regulations.

To qualify for a Deferred Payment Agreement in England you must:

Have been assessed as needing permanent residential or nursing care
Own a property whose value would otherwise be included in the financial assessment
Have capital of no more than £23,250 excluding the property
Be willing to grant the council a legal charge over the property

The council is required by law to offer a DPA to anyone who meets these criteria. It is not discretionary. If you are eligible and want one, the council must provide it.

Our detailed guide to deferred payment agreements for care home fees explains how the arrangement works in practice, including what happens to the property after death.

Can I rent out my home instead of selling it?

Yes, and for many families this is a practical middle route. If you rent your home rather than selling it:

The rental income is assessed as part of your financial assessment and will contribute to your care fees
The property value may still be included in your capital assessment after the 12-week disregard
A Deferred Payment Agreement can still run alongside a rented property in some circumstances

Renting offers a way to generate income towards fees while preserving the asset itself. Whether this makes financial sense depends on the level of fees, the rental income achievable, and the length of care required. Independent financial advice is recommended before making this decision.

What about deliberate deprivation, can I give my home away?

The rules on this are strict. Under the Care Act 2014, local authorities are entitled to investigate asset transfers and treat assets you have given away as if you still own them, if they conclude that reducing your care contribution was a motivating factor.

There is no statutory time limit on how far back this investigation can reach. The relevant test is whether avoiding care fees was a significant reason for the transfer, not whether it was the only reason.

Giving your home to your children, placing it in a trust, or transferring ownership to reduce the property's assessed value can all be treated as deliberate deprivation if the timing or circumstances suggest the move was care-related.

Our article on deprivation of assets covers this in detail, including how the council makes its assessment and what you can do if you disagree with the decision.

Does the 7-year rule apply to property?

The seven-year rule is a concept from inheritance tax law, not care funding law, and the two are frequently confused. There is no equivalent rule in the care funding system that automatically protects a gift made more than seven years ago from being treated as deliberate deprivation.

Each case is assessed individually based on intent and circumstance, not the date of the transfer. This is explained in full in our article on the 7-year rule for care home fees.

What if I have a joint mortgage or shared ownership?

Where a property is owned jointly, for example, as tenants in common, only your share of the property value is taken into account in the financial assessment. The other owner's share is not assessed.

The structure of joint ownership can therefore have a significant effect on how much of the property's value is included. If you own as joint tenants rather than tenants in common, the full beneficial interest is more likely to be attributed to you. Specialist legal advice before care is needed can be worthwhile for couples who want to understand the implications.

Can I use equity release to pay for care without selling?

Equity release products allow you to draw cash from the value of your home without selling it. For some people, this provides a way to fund care costs while retaining ownership. However, there are important considerations:

The equity released will be treated as capital in the financial assessment
Interest compounds over time, potentially reducing the remaining estate significantly
Equity release products are regulated by the Financial Conduct Authority and carry long-term implications

This is a specialist area and independent financial advice from a care fees adviser is essential before proceeding.

Summary: Your main options for keeping your home

Spouse or qualifying relative lives there - Permanently disregarded, not counted at all
No qualifying occupant, capital below £23,250 - 12-week disregard applies automatically
Capital below £23,250 after disregard - Deferred Payment Agreement available by law
Home is rented out - Rental income assessed; property may still be included in assessment
Property transferred to family - May be treated as deliberate deprivation

FAQ

Can the council force me to sell my house to pay for care? No. A council cannot compel you to sell your property. If eligible, you can use a Deferred Payment Agreement to delay any sale until after your death, with the debt recovered from your estate.

What if I jointly own my home with a sibling who is over 60? If your sibling is aged 60 or over and lives in the property, your home is mandatorily disregarded from the financial assessment for as long as they continue to live there.

Does renting my house out affect my benefits? Rental income is treated as income in the means test and will increase your assessed contribution to care costs. It may also affect means-tested benefits. You should check this with the council and consider independent advice.

What happens to a Deferred Payment Agreement when I die? The council will recover the outstanding amount, including accumulated interest, from your estate, usually through the sale of the property. Your executor is responsible for repaying the debt. Any remaining equity passes to your beneficiaries.

Can I still choose my preferred care home if I have a Deferred Payment Agreement? In most cases, yes. However, the total cost of the care home must be within the equity limit the council calculates for your DPA. If the home is significantly more expensive than the council's standard rate, a top-up fee may be required. Our guide to care home top-up fees explains how this works.

Should I get financial advice before deciding what to do with my home? Yes. The care funding system is complex, and the right approach depends on your individual circumstances, the value of your property, your income, and the level of care you need. A specialist care fees financial adviser, regulated by the Financial Conduct Authority, is best placed to guide you.

Find out more

Understanding your options early makes a meaningful difference to the decisions ahead. Our full care home funding guide covers the means test, NHS Continuing Healthcare, deferred payments, and what happens when funding arrangements change over time.

You may also find these articles useful:

If you would like to speak with our team about care at Ashberry and what the funding process involves, we are always happy to have that conversation. Make an enquiry and we will be in touch.

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