When a parent moves into residential aged care, the family home often becomes a major practical and financial question. Should it be sold, rented, kept vacant or transferred to a family member? The answer depends on your parent’s wishes, their finances, who lives in the home and how it is owned.
First, check how the home is owned
Obtain a current title search and check whether your parent owns the property alone or with someone else, and whether it is held as joint tenants or tenants in common. This can affect who owns the property if an owner dies and whether probate may be needed. Check also for a mortgage or other interest that could affect a sale or transfer.
If your parent has decision-making capacity, they make the decision about their home. An attorney under an enduring power of attorney may act only within the authority given by the document and must follow legal duties. Moving into care does not, by itself, give relatives a right to sell or transfer the property.
How the home may affect aged-care costs
A home may be included in the residential aged-care means assessment, but special rules apply. For example, it may be excluded if a “protected person” continues to live there. This can include a partner or dependent child, or in some circumstances a qualifying carer or close relative who has lived in the home for the required period. If no protected person remains, generally only a capped amount or the home’s net market value (if lower) is counted.
The assessment may change if the home is sold, rented or otherwise dealt with. Before deciding, obtain a means assessment and ask Services Australia or the Department of Veterans’ Affairs how the proposed arrangement may affect fees and contributions.
What is a RAD?
A Refundable Accommodation Deposit (RAD) is a lump sum paid towards the agreed price of a room in an aged-care home. Depending on the resident’s means assessment, they may instead be eligible for government assistance towards accommodation costs. A resident may also pay daily accommodation payments (DAPs), or use a combination of a lump sum and daily payments.
The RAD is not the full cost of care, and the family home does not automatically have to be sold to pay it. A resident can consider whether to sell or rent the home, use other funds or pay daily amounts. The remaining RAD balance is generally refundable to the resident or their estate when they leave care, less applicable deductions. For residents entering care from 1 November 2025, RAD retention rules may also reduce the refundable balance over time.
Think carefully before selling, renting or transferring
Selling can provide funds and simplify property management, but may involve sale costs, tax questions and a change to the aged-care assessment. Renting may provide income, but brings landlord obligations, maintenance and vacancy risks.
Transferring the home or adding a child to the title can have serious consequences. Victorian land transfer duty may apply, capital gains tax may need consideration, and gifting rules may mean the asset is still counted for a period. Your parent may also give up control of a valuable asset.
Before signing a contract or transferring title, have the property and estate-planning implications reviewed together. A solicitor can check the title, explain the sale or transfer process, and help ensure any decision reflects your parent’s wishes and protects their interests. Financial advice may also be needed when comparing RAD and daily payment options.
Please note, this article is general in nature and does not take into account your personal situation or circumstances. For further information please contact Kenney Legal at info@kenneylegal.com.au or contact us via our social media networks.