Your Home, Care Fees and the Family

What older homeowners, their families and attorneys need to know before selling or giving away a home

David Pett, Risk and Compliance Director, MJP Conveyancing  |  October 2026

For many people, their home is the most valuable thing they own. If they later need care, it is often also what pays for it. Whether you are selling your own home, selling for a parent under a power of attorney, or thinking about passing property or money to your family, the decisions you make now can affect how care is paid for later. This guide explains the rules in plain English, the misunderstandings we come across most often, and what to tell us at the start so that your sale runs smoothly.

Why this matters

In England, councils carry out a financial assessment, often called the means test, to decide how much a person pays towards their care. For 2026 to 2027, anyone with savings and other assets above £23,250 is normally expected to pay the full cost of their care. Below £14,250, savings are ignored and the person contributes from their income. Between those two figures, the council expects a contribution from both. These limits have not changed since 2010.

Care home fees are high. For most people who move permanently into a care home, the value of their home means they will pay for their own care until their savings fall to £23,250. There are important exceptions. If a person’s needs are mainly health needs, the NHS may pay for their care in full (this is called NHS continuing healthcare). Care provided after certain stays in hospital under the Mental Health Act is also free. If either might apply, ask for an assessment before assuming that you must pay.

How the council treats your home

• While you live at home, the value of your home is ignored if you receive care in your own home.
• If you move permanently into a care home, the value of your home is ignored for the first 12 weeks. This gives you and your family time to decide what to do. It does not mean 12 weeks of free care: if your other savings are above £23,250, you will still pay in full.
• Your home continues to be ignored if it is still lived in by your husband, wife or partner, by a relative who is aged 60 or over or is disabled, or by your child under 18, provided they were living there before you moved into the care home. The council can also choose to ignore it in other cases, for example where a relative moved in to look after you.
• If you do not want to sell straight away, you may be able to enter into a deferred payment agreement. The council pays the care home and registers a charge against your home, much like a mortgage. Interest is added, at a maximum rate that is currently 4.65 per cent a year, together with set up and administration fees. The total is repaid when the home is sold or after your death. You will normally qualify if your savings, not counting your home, are £23,250 or less.

Once the home is sold, the money from the sale will normally count as your savings, and the council will reassess what you pay. If the money is going to be used to buy another home that you intend to live in, it can usually be ignored for up to 26 weeks, or longer if that is reasonable.

If your partner or a relative is still living in the home and you are thinking of selling, please take advice first. Selling may bring to an end the protection that their living there has been giving to your share of the property.

Giving your home or money to your family

One of the things we hear most often is this: ‘If I give my house to my children and live for another seven years, the council cannot touch it.’ That is not correct. The seven year rule is part of inheritance tax. It has nothing to do with care fees.

If a council decides that you gave away money or property in order to reduce what you pay for care, it can treat you as though you still own it. This is known as deprivation of assets. The council will look at why you made the gift and when you made it. It will ask whether avoiding care fees was a significant reason, and whether you could reasonably have expected to need care at the time. A gift made when you were fit and healthy, with no reason to expect to need care, should not be treated in this way. There is no fixed time limit. What matters is the reason and the timing, not how many years have passed.

The consequences can reach your family too. If the council pays for your care and concludes that a gift was made to avoid care fees, the person who received the gift can be asked to pay the council back, up to the value of what they received.

The seven year rule belongs to inheritance tax. For care fees, what matters is why and when a gift was made.

Other risks of giving your home away

• You lose ownership and security. Once your home belongs to your children, it is exposed to their circumstances, including divorce, debts and bankruptcy. You would have no automatic right to stay if things went wrong.
• It may not save inheritance tax. If you continue to live in a home you have given away without paying a full market rent, it is usually still treated as part of your estate for inheritance tax.
• Your children may pay tax later. When they sell a home they have not lived in themselves, they may have to pay capital gains tax on any increase in its value.
• A mortgage needs the lender’s consent, and taking over a mortgage debt can create a stamp duty land tax bill.

None of this means you can never make a gift. You are free to do as you wish with your own property. It does mean that the decision should be properly advised and honestly recorded. If you ask us to transfer your home to a family member, we will act for you, not for them, and we will usually want to speak to you on your own. That is standard good practice to protect you. It is not a suggestion that anyone is doing anything wrong.

Helping a family member buy a home

Parents and grandparents often help younger relatives with a deposit. The gift letter that a mortgage lender asks for protects the lender. It does not protect the person receiving the gift. If the person giving the money later needs care funded by the council, and the council decides the gift was made to avoid care fees, the person who received it could be asked to repay up to the amount they were given. If you are giving money from the sale of your own home, or you are already receiving care, please take advice before you make the gift.

If the money is being paid by an attorney on behalf of a parent or grandparent, much stricter rules apply. These are explained in the next section.

If you are acting under a power of attorney

Many of the sales we handle are carried out by attorneys acting for a parent or other relative. Being an attorney is a position of trust. You must act in the best interests of the person who appointed you, known as the donor, and the law places firm limits on what you can do.

• You need the right power. To sell a home, you need a registered lasting power of attorney for property and financial affairs, or a registered enduring power of attorney. A health and welfare power does not allow you to sell. We will check the power, usually through an access code from the Office of the Public Guardian’s online service, and we will need to verify your identity as well as the donor’s.
• The donor decides if they can. If the donor is still able to make the decision to sell, it remains their decision, and we will want to meet them where possible.
• Gifts are very limited. An attorney can make only modest gifts on customary occasions, such as birthdays, weddings or religious festivals, to family or friends, or to a charity the donor supported, and only if the amount is reasonable given the donor’s means. Larger gifts, such as giving away the house, the sale money or a house deposit, need the permission of the Court of Protection. An attorney cannot give away the donor’s property to avoid care fees.
• You cannot buy the property yourself, or sell it to a member of your family, without permission from the Court of Protection, even if you pay the full market value. A transfer that an attorney had no power to make can be reversed by the court.
• The money belongs to the donor. The sale proceeds will be paid into the donor’s own account, unless there is a proper legal reason to pay them elsewhere, such as repaying a genuine debt that the donor owes.
• Joint owners need a second person. If you own the home jointly with the donor, for example as husband and wife, you cannot sign both for yourself and for the donor. Another person will need to be appointed to act with you. Please tell us at the start so that we can arrange this.
• The power ends on death. If the donor dies before completion, the attorney can no longer act. The sale can usually still go ahead, but it may be delayed while the estate is dealt with.
• If there is no power of attorney and the owner can no longer make their own decisions, an application to the Court of Protection is needed before the home can be sold. This can take several months, so please let us and your estate agent know as early as possible.

Council charges and debts when you sell

If the council has been paying for care, it may expect to be repaid from the sale. This can happen in several ways.

• A deferred payment agreement is secured by a charge registered against the property, and it will be repaid from the sale proceeds on completion. The amount grows every day because interest and fees are added, so we will ask the council for an up to date figure.
• An older council charge may appear on the title where care began before April 2015. These charges are still repayable when the home is sold, and interest may be added after the owner’s death.
• Unpaid care fees may have built up while the home was on the market, if the council agreed to fund care in the meantime. The council may write to us asking for the amount to be paid from the sale proceeds. We will ask for a full breakdown, check it with you, and pay it only with your written agreement.
• A charging order may be registered against the property if the council has obtained a court judgment for unpaid fees. It will need to be dealt with on or before completion.

Telling us about any arrangement with the council at the very start avoids last minute delays. We will not share your information with the council without your agreement unless the law requires us to.

What to tell us at the start

One thing to remember

We are conveyancers. We can explain how these rules affect your sale or purchase, but we do not give care fees planning or financial advice. If you are thinking about giving away your home or money, or about how to pay for care, please speak to a solicitor who specialises in later life planning, or to an independent financial adviser accredited by the Society of Later Life Advisers, before you act. Age UK also publishes free and helpful factsheets on paying for care.

The best protection is to ask questions early. A short conversation at the start of a sale can save a long and stressful one at the end.

This guide is for general information only and does not constitute legal or financial advice. It describes the position in England as at October 2026; different rules apply in Wales. Figures and rates change regularly. For advice on your own circumstances, please speak to us or to a specialist adviser.