Do I Have to Sell My House to Pay for a Care Home? (2026 Rules)

Your home is included in the local authority means test when you move into permanent residential care — but that does not automatically mean you have to sell it. The rules around property and care funding are more nuanced than the headline suggests, and several legal mechanisms exist to prevent a forced sale. This guide sets out the current rules in England for 2026, including when your home is counted, when it is exempt, and the alternatives to selling.

How the means test works

When you apply to your local authority for help funding residential care, the council carries out a financial assessment (means test). This looks at your income, savings, and capital — including property.

| Capital level | What happens | |---|---| | Above £23,250 | You pay the full cost of your care (self-funder) | | Between £14,250 and £23,250 | You contribute from your capital on a sliding scale | | Below £14,250 | The council pays, but you contribute from your income |

For most people, the value of their home pushes their total assets well above the £23,250 upper threshold, which is why the question of selling arises.

When your home IS counted

Your property is included in the capital assessment when all of the following apply:

• You are moving into a permanent residential or nursing care placement
• Nobody from a qualifying category still lives in the property
• The 12-week property disregard period has ended

If your home is valued at, say, £250,000 and you have £30,000 in savings, your total capital is £280,000 — far above the £23,250 threshold. You would be assessed as a self-funder.

When your home is NOT counted

There are several situations in which your property is disregarded (excluded) from the means test:

| Scenario | Home counted? | |---|---| | Your spouse or civil partner still lives there | No | | A dependent child under 18 lives there | No | | A relative aged 60 or over lives there | No | | A relative who is incapacitated lives there | No | | You are receiving care at home, not in a care home | No | | First 12 weeks of a permanent residential placement | No | | You are in a care home on a temporary basis | No |

The 12-week property disregard is automatic. For the first 12 weeks after you enter permanent residential care, the council must ignore the value of your home. This gives you time to consider your options without being forced into a quick sale.

Deferred Payment Agreements (DPA)

A Deferred Payment Agreement is the main mechanism that prevents forced sale of your home. Under a DPA, the local authority effectively lends you the money to pay for your care, secured against your property. The debt is repaid when the property is eventually sold — either after your death or if you choose to sell.

How it works:

• You apply to your local authority for a DPA
• The council places a legal charge on your property
• You continue to contribute from your income (usually pension), but the council covers the shortfall
• Interest is charged on the deferred amount — currently around 1.45% (set by the government, reviewed annually)
• An administration fee may also apply (typically £300-500)
• The total debt cannot exceed the value of your property minus 10% (to cover sale costs)

A DPA means no forced sale during your lifetime. You retain ownership of your home, and the debt is settled from the estate after death or from the proceeds if the property is sold voluntarily.

Not everyone qualifies. You must have less than £23,250 in non-property assets, and your property must not already have someone living in it who would make it exempt.

Alternatives to selling your home

Renting out the property

You can rent out your home while you are in care. The rental income counts towards your care costs, but the property itself is not sold. This can be a practical option if the rental income covers or substantially reduces the gap between your other income and the care fees.

Equity release

Equity release products (lifetime mortgages or home reversion plans) allow you to access some of the value in your home without selling it outright. However, these are complex financial products with long-term implications. Independent financial advice from an adviser authorised by the Financial Conduct Authority is essential before considering this route.

Top-up payments from family

If the council is funding your care but you want a more expensive home than the council rate covers, a family member can make a "top-up" payment to cover the difference. This does not prevent the property from being counted, but it can reduce the pressure to sell immediately by supplementing council funding.

Personal budgets and direct payments

If you qualify for council funding, you can request a personal budget or direct payment, giving you more control over how your care is arranged and potentially reducing costs.

Deliberate deprivation of assets

Giving away your home — or transferring it to a family member — to avoid paying for care is known as deliberate deprivation of assets. If the local authority determines that you disposed of assets specifically to reduce your liability for care costs, they can assess you as though you still own the property.

There is no fixed time limit on this. The council looks at whether avoiding care costs was a significant motivation for the transfer, not simply how long ago it happened. Transfers made years before care is needed, with no evidence of intent to avoid care costs, are less likely to be challenged — but there is no guaranteed safe period.

How property value interacts with the thresholds

| Situation | Total capital | Who pays? | |---|---|---| | Home worth £200,000, savings £20,000, no qualifying person at home | £220,000 | You (self-funder) | | Home worth £200,000, savings £20,000, spouse still at home | £20,000 | Council contributes (sliding scale) | | Home worth £200,000, savings £20,000, first 12 weeks | £20,000 | Council contributes (12-week disregard) | | Home worth £200,000, savings £5,000, DPA in place | £5,000 | Council pays via DPA (you repay later) | | Receiving care at home, home worth £200,000 | £20,000 (home excluded) | Council contributes |

What to do next

The rules around property and care funding are among the most complex in the social care system. Your first step should be contacting your local authority's adult social care team to request a financial assessment.

For a broader overview of how self-funding works, including what counts as capital and how contributions are calculated, see the self-funding guide. To estimate your potential care costs based on your area, use the cost calculator.