Should you sell the
family home when your parents move to an aged care home?
It's often a difficult decision for your parents to move
to an aged care home.
The decision is made more difficult
by the need to decide whether or not to sell the family home
when they move out. Often these decisions are made for the
parents by the child acting under an Enduring Power of
Here are some options -
- The family home will need to be sold if the move is
to an aged care home where a bond is payable, to pay for
the bond. Large bonds of $600,000 are common for aged
care homes in Sydney.
- The family home can be transferred to a child, a
nephew or niece. If so, stamp duty must be paid on the
value (regardless of whether it is a gift or it is paid
for). No stamp duty is payable if you wait and the
transfer takes place on death (there is no death duty in
- The family home can be kept, and rented out, if the
move is to an aged care home where no bond is payable.
If so, the aged care costs must be funded.
The Commonwealth Government will pay the aged care costs,
subject to a means test. Even if you qualify for a full
pension, you may not qualify for aged care costs payments.
For instance, to satisfy the Centrelink rules for the
aged care means test, the person cannot own, or cannot have
owned a home within the previous 5 years (at least).
Why is this an issue? Without government assistance, aged
care cost can exceed a full pension and must be funded by
the person out of their own assets.
To find out more and how not knowing the Centrelink rules
can lead to an unmitigated disaster, click on my article -
Attorneys transferring the principal's home to themselves
must be careful