Moving into residential aged care can involve many decisions. One of the biggest is what to do with the family home.

For many Australians, the home is their largest asset. It may also hold significant emotional value. This can make the decision to sell, rent or retain it particularly difficult.

Importantly, moving into residential aged care does not automatically mean you need to sell the family home.

There are several options to consider. The right decision will depend on your individual circumstances.

Option 1: Sell the family home

Selling the former home can give you access to capital to help fund residential aged care.

For example, you may use the sale proceeds towards your accommodation costs or other ongoing expenses.

However, selling the home can also have broader financial implications.

Before making a decision, consider how you will use the sale proceeds. You should also consider how the sale could affect your overall financial position.

Taxation, social security, aged care and estate planning may all play a role.

Option 2: Rent the family home

Some people choose to keep the family home and rent it.

Rental income can provide additional cash flow to help meet ongoing expenses. It also allows you to retain ownership of the property.

However, rental income is only one part of the equation.

You may need to pay property management costs, maintenance, insurance and rates. There may also be taxation considerations.

It is also important to consider how the property and rental income could affect your broader financial circumstances.

Option 3: Keep the family home

You may have personal or financial reasons for keeping the former home without immediately renting or selling it.

For example, you or your family may need more time before making a permanent decision about the property.

Keeping the home can give you time to consider your options. However, the property may continue to create expenses without generating income.

Rates, insurance, maintenance and other property costs can continue while the home is vacant.

You therefore need to consider how you will fund these costs alongside your aged care expenses.

How will you fund your aged care accommodation?

The decision about the family home often links closely to how you fund your residential aged care accommodation.

Depending on your circumstances, you may have different ways to pay your accommodation costs. These can include a lump-sum payment, ongoing accommodation payments or a combination of both.

As a result, you should not assume that you need to sell the family home simply because you have received an accommodation price.

Before selling a significant asset, take the time to understand the different ways you could fund your aged care costs.

Look at the complete financial picture

There is no single answer to whether you should sell, rent or retain the family home.

Your strategy may depend on your:

• aged care costs
• accommodation payment strategy
• income and cash flow
• investments and other assets
• social security position
• taxation considerations
• estate planning objectives
• personal and family preferences.

Looking at these factors together can help you understand the longer-term impact of each option.

Talk to us before deciding what to do with the family home

Decisions about the family home can have significant financial consequences. This is particularly important when you make them alongside a move into residential aged care.

At Forman Financial Services, we can help you understand how different options may affect your financial position. We can also help you consider strategies that suit your individual circumstances.

Book a meeting with us here to discuss your aged care options before deciding whether to sell, rent or retain the family home.

Disclaimer and Warning

The information above is of a general nature only.  It should not be used as a source to make financial decisions. It’s also important to note that the legislation and figures related to this topic tend to change regularly and therefore the information above may not reflect the current status. We recommend that if you are looking for advice on this matter, you should contact us.