Factsheet: Going into residential or nursing care when you own a property
Summary
April 2026
This factsheet explains your options if you own your home and its value is included in your financial assessment.
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What happens to my home?
If you are moving into a care home to live there, we may include the value of your home in your financial assessment.
We won't count your home if one of these people still lives there:
- Your husband, wife or partner.
- A relative who is 60 or over.
- A relative who is ‘incapacitated’. This means they receive or are eligible for certain disability benefits.
- A child under 18.
If we include your home, this usually means you’ll have to pay the full cost of your care.
This is explained in our factsheet, Financial assessments for residential care
If most of your money is tied up in your home, you will need to decide how you will pay for your care.
Other properties and land
If you own a second property or land, we will include the value of this in your financial assessment.
Your choices if we include your home
You have several options if we include your home:
- A deferred payment agreement or another loan based on the value in the property.
- Selling your home: You could ask your care provider if they can hold the care fees until you sell your property.
- Renting your home: Whether you can do this depends on your income and whether other people can help to pay for your care. We can give you a list of organisations that can help with looking after your property and renting it out.
Getting financial advice
We recommend that you talk to an independent financial adviser. They can help you to decide on the best way to pay for your care.
The Society of Later Life Advisors (SOLLA) is a non-profit organisation that helps people find accredited financial advisors:
Phone: 0333 2020 454
Benefits
If you move into a care home, it may affect your benefits. You must tell the Department for Work and Pensions (DWP) about any changes.
If you pay the full cost of your care, you can still get these benefits while you are in a care home:
- Attendance Allowance
- Personal Independence Payment (PIP) – daily living and mobility
- Disability Living Allowance (DLA) – care and mobility
If the council or NHS pay for your care, most benefits will stop after 28 days in a care home.
You can find out more about this at Claiming benefits if you’re going into a care home | GOV.UK
The 12-week property disregard
We may ignore the value of your home for the first 12 weeks that you live in residential care. This gives you time to decide what to do.
This is called the ‘12-week property disregard’. You can get this if you are moving into a care home to live there and:
- you have not already been paying the care home fees privately
- you moved directly from your home into the care home
- you have less than £23,250 in savings and assets (not including the value of your home)
You cannot get a 12-week disregard if, before you moved into the care home:
- you were renting (long term)
- you lived in a relative’s house
What you will pay during the 12-weeks
If you get a 12-week property disregard, we will work out how much you can afford to pay towards your care costs.
The amount you pay is called your ‘contribution’. We will base this on your income, savings and assets. We don’t include the value of your home at this point.
During the 12-week period we will work with a care provider to meet your care needs. You will need to pay your ‘contribution’ towards your care and we will pay the difference.
Top-up payments
The Council pays a set amount for residential and nursing care. These are our ‘usual rates’.
If the care home that you choose is more expensive, you or another person will need to pay the difference between their rate and our usual rate. This is called a ‘top-up’ payment.
After the 12-week period ends
- We will include the value of your home when we work out how much you should pay.
- If the money held (equity) in your property is £23,250 or over, you will need to pay the full cost of your care.
- Our contract with the care provider will end. You must arrange to pay the care home directly for your care.
Deferred payment agreement (DPA) scheme
A ‘deferred payment agreement’ is where the Council lends you the money to pay for your care home fees.
It may be suitable if:
- you need to pay the full cost of your care
- your savings and other assets are low
- the value of your home puts you over the financial limit of £23,250.
The loan is secured against your home. You’ll pay us back later, either when you sell or after death.
By law, we must offer a deferred payment agreement if:
- you live in our local authority area
- you need to receive care and support in a care home
- you have £23,250 or less in savings and other assets (not counting the value of your main home)
- your home is included in the financial assessment
- we can place a legal charge on your property
We can refuse a deferred payment agreement if:
- we cannot secure a legal charge on the property
- the care home will not accept our ‘usual rates’
- you do not agree to the terms and conditions
Who can apply?
You can apply for a DPA if you plan to sell, keep or rent your property and meet the above criteria.
We can also offer it to people in supported living accommodation who intend to sell their property. You can read more about this in the Extra care housing or supported accommodation section.
How much can be deferred?
Usually, we will pay up to our ‘usual rates’ (the set amount we pay care homes). If you want to go into a care home that costs more than our usual rates, a member of your family can pay the extra amount. This is called a ‘top-up’ payment.
You still have to pay your regular ‘contribution’ towards your care. This is paid from your income, and other savings and assets (not including your home).
If you have a life-limiting illness, we may be able to lend more. If we cannot, you will need to think about other ways to pay for your care. An independent financial adviser can advise you on other options.
When you apply, you must check that the care home will accept our usual rates and let us know on the application form.
If your care provider does not accept our usual rates, you will have to pay privately.
The most we can lend you is the value of your share of your property:
- minus 10% for selling costs
- minus the nationally set lower capital limit of £14,250
This is called the ‘equity limit’.
Repaying the loan
The government regulates these loans and debts must be repaid and cannot be written off.
If the property is sold, the debt must be paid immediately.
If the loan ends because you die, your estate has 90 days to pay the money back.
If the debt is not paid in full within 90 days:
- additional interest could be added
- we will begin our debt recovery process
Interest on the loan
Interest is applied from the start of the loan and payable until it is paid in full. It is reviewed on 1 January and 1 July each year. It is based on the market gilt rate + 0.15%. So, if the gilt rate is 1%, the interest on the DPA is 1.15% (1 + 0.15).
Interest is compounded, meaning it is added to the loan and interest is continuously charged on the increasing amount.
Other costs
We do not make money from this scheme. We only charge set up and administration costs.
You will need to pay:
- a set up cost to administer your application and register the legal charge
- the cost of any property valuations during the application process or loan period
- an annual administration fee (invoiced or added to the loan every six months)
- a redemption fee at the end of the agreement
- any costs outside of our charges, like solicitors’ fees
- your regular contribution to the cost of your care
Valuations
Solely owned property
If you are the sole owner, we can use a market valuation or an online valuation. If we agree with the value, you do not need a formal valuation.
You will need a formal valuation if:
- the property is of non-standard construction
- the property is used for business or agriculture
- the property is in poor condition
- we cannot agree on a valuation figure
You can ask for an independent valuation, but you will have to pay for it.
We will arrange formal valuations when the loan reaches 50% and 70% of the equity in the property. You will be charged for these.
Jointly owned property
If you own the property with someone else, we only include the value of your share. We will use an independent professional to decide the value. You will need to pay for this.
Usually, we use a desktop valuation, unless the property is non-standard or is in poor condition. You will be charged an hourly rate for this.
The co-owner must agree and sign the deferred payments agreement and the legal charge. This allows us to register a charge against the property as security for the loan.
The legal charge will be against the whole property, but we only loan up to the value of your share, minus the equity limit.
Income for personal expenses and maintenance
The law says we should leave you with a weekly ‘disposable income allowance’ of £144. This amount includes the weekly ‘personal expenses allowance’ of £31.80.
The rest of the money is to maintain your property.
You may choose to use some of the £144 per week towards your care costs.
Think about how best to use the rest of your allowance to:
- look after and maintain your property
- pay for insurance
- pay for heating to prevent damp and frost damage
- keep it secure
- pay DPA scheme administration costs
Renting out your property during the DPA
You may choose to rent out your home to reduce the loan amount. It’s a good idea to discuss this with family and friends. You could also consult an independent financial adviser.
If you rent it out, you must:
- let us know and update us with any changes
- only rent the property on a six-monthly tenancy
- agree what will happen if the property is still occupied when the loan is due to be repaid
We will include 90% of the rental income when we calculate how much you will pay towards your care from your income.
Extra care housing or supported accommodation
We can offer a DPA to people who need to move into supported accommodation, extra care housing or a care suite. This gives you short-term support to pay for your care fees while you sell your property.
We will offer this if you are moving into this type of housing and:
- you live in our local authority area
- you have £23,250 or less in savings and assets (not including your home)
- your home will be included in the financial assessment
- you are actively selling your former home.
You will not get a 12-week disregard. Depending on which comes first, the DPA would start:
- from the date you move in, or
- when your savings and assets reach £23,250
In your financial assessment, we allow for your living costs as part of the ‘minimum income guarantee’. The amount is set nationally and depends on your circumstances.
We will allow for any contractual or upkeep costs, such as service charges or a mortgage while you are selling the property.
How to apply
You (or your legal representative) must fill in our application form and provide original or certified copies of the documents we ask for.
If the person receiving care does not have mental capacity, a deputy or attorney can apply for them. If there is no deputy or attorney, someone will need to apply to become a deputy. More information can be found at Deputies: make decisions for someone who lacks capacity | GOV.UK
The Council cannot release any money until:
- you complete the Deferred Payments Agreement
- you complete the ID1 form and return it to our Legal Services team
- a legal charge in favour of East Sussex County Council has been registered against the property
The Deferred Payments Agreement and legal charge must be signed by:
- the person receiving care or their representative
- any co-owners of the property
Everyone who signs the legal charge must also return a completed ID1 form.
HM Land Registry requires your identity to be checked. This can be done by a conveyancer, a chartered legal executive, or by visiting one of the Land Registry’s customer information centres.
Details of what evidence is needed is shown in Appendix 1.
How to contact us
If you have any questions or need an application form, contact our Finance and Benefits Assessment team:
Phone: 01323 464 699
Email: fab@eastsussex.gov.uk
Appendix 1: Proof of identity
This is the evidence you need to bring to the conveyancer, chartered legal executive, or HM Land Registry officer:
One of the following (List A):
- current valid full passport – state the country of issue and number of the passport
- current photocard driving licence (not a provisional licence) for United Kingdom, EU, Isle of Man, Channel Islands – state the number of the licence
- current Biometric Residence Permit issued by the UK Home Office to a non-UK national resident in the UK – state the number of the permit
Or
Two of the following (List B) but no more than one of each type:
- credit card (Mastercard or Visa), American Express or Diners Club card. Or a debit or multi-function card (Maestro or Visa) which was issued in the United Kingdom and is supported by an original account statement less than three months old *
- utility bill less than three months old*
- council tax bill for the current year
- council rent book showing the rent paid for the last 3 months
- mortgage statement for the mortgage accounting year just ended*
- current firearm or shotgun certificate
* These must be postal statements. They must not be statements sent electronically.
You will also need to take two identical passport-size photographs which are less than three months old.
The conveyancer, chartered legal executive, HM Land Registry officer or other approved verifier will complete section B of the form.
Conveyancers and chartered legal executives may charge a fee to verify your identity.
