In this section you will find information on:

  • The value of your property
  • The 12-week disregard
  • Selling your property
  • Ownership issues
  • What if somebody lives in your property? Tenants in your property

The value of your property

The value of any property you own will be taken into account when calculating your capital assets unless it qualifies for one of the disregards listed below. Whenever the property is eventually sold, the council will expect to make a charge against that sale price for any fees or proportion of fees due by the date of the sale. After, if you are still living in the care home, the money generated by the sale will be taken into account as part of your capital. This will normally mean that you will pay all care home fees until your total capital, including the value of your home if it is counted, has fallen to £23,250.

12-week disregard

If you have less than £23,250 in savings and your move into a care home has been agreed as permanent, the council must ignore the value of your home for the first 12 weeks of your care home stay.

If your property is sold before or during the 12-week disregard, then the disregard period stops. Once the 12-week disregard period finishes, your property will be counted as part of your capital.

Selling your property

Selling your property once you move into a care home releases capital and allows you to start making your assessed contribution to the cost of your care. But selling a house can take time, or you may wish to delay selling. Your council may be willing to make arrangements under the following options to help in such circumstances.

Deferred payment

If you have less than £23,250 in capital savings, but own your own property that you do not wish to or cannot sell immediately when you move into a care home permanently, you can request a deferred payment agreement.

The deferred payment scheme will see the local authority pay the cost of your care fees while you remain in a care home. While you are alive, no interest will be added to the loan, but 56 days after you die interest at a rate determined by the council will start to be added to the amount paid by social services for your care.

Once the property has been sold by its inheritor, the money must be paid back to social services with any accrued interest.

If the council refuses the option of deferred payments, they must explain their decision in writing. If you plan to apply for deferred payment, you will not be entitled to Pension Guarantee Credit. This is because you have chosen not to use the capital tied up in your property.

Ownership issues

Ownership of property is complicated because of the nature of title deeds and the following rules apply when dealing with property ownership and care home fees:

  • If you are the only legal owner (as in you own the title deeds) and beneficial owner then you will be entitled to all the profits following the sale of the property and the council can take all this money into account when carrying out your financial assessment
  • If you legally own the property but have no beneficial interest (or have not paid any money into the property), the council should not consider the property
  • If an agreement is signed by joint legal owners that includes details of beneficial ownership (and which has been made clear to HM Land Registry), this should be counted as written evidence of how beneficial interests should be assessed
  • If it is established that you have a beneficial interest in the property, the council should work out the actual value of this interest and use it in your financial assessment However, you should be aware that this beneficial interest may not be the same as your own contribution towards the cost of the property

If you are a joint beneficial owner, the council has to take the following into account:

  • Your ability to sell your share of the beneficial interest to someone else
  • Someone being willing to buy your share of the beneficial interest

If you are to sell your beneficial interest, it must also be for a reasonable amount otherwise it will be seen as deprivation of capital. It is also reasonably assumed that if the other joint owner is not willing to buy your share of the beneficial interest, then it is unlikely that someone with no interest in the property will buy your share. As a result, your share of the value of the property will most likely be deemed zero.

What if someone else lives in your property?

Your property will not count towards your care home fees if your partner lives in the house even if it is solely in your name. The property will also be disregarded if a close relative lives at the address and is:

  • Aged 60 or over
  • 16 or under and living in your care
  • Incapacitated to the point of qualifying for a disability benefit

If this person ceases to occupy the house, it will be incorporated into your financial assessment. Occasionally, the council will let someone live in the house, but place a legal charge on it so they can recover the money once it has been sold. You should be notified by the council if they place a legal charge on the property.

Tenants in your property

If you have tenants living at the property, it will be taken into account for the financial assessment. If it is valued at over £23,250 you will be required to pay the care home fees yourself. The rent you receive from the tenants will also be taken into account. If you have a deferred payment scheme in place, any rent will be used towards the care home fees and will reduce the amount of money that has to be paid back.

For more detailed information on the treatment of property download the FirstStop factsheet by clicking here