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Is this possible. Re Tm and "dementia tax"

(110 Posts)
monkeysox Wed 24-May-17 18:14:00

Have been thinking about this.

If many people no longer inherit big ish sums due to care costs (home not taken into account at the moment for care in own home) how will this affect the housing market?

Government may end up "owning" shares of lots of houses but who will have a deposit to buy one of them?

It would take loads of potential homeowners out of the market.

Aibu does that make sense?

CrazedZombie Wed 24-May-17 19:17:21

I think that the proposal means that someone with a £500k property would have up to £400k used on their care and the remainder could be bequeathed,

CrazedZombie Wed 24-May-17 19:17:50

£100k is still a big inheritance.

drinkingtea Wed 24-May-17 19:19:17

Maybe, if it really happened, house prices would fall somewhat. That has to be a good thing.

ExplodedCloud Wed 24-May-17 19:25:43

I don't think it will cause a drop. Equity firms will want their money back and care firms will put their prices up because they can. There will just have to be different finance to enable people to buy.

Kursk Wed 24-May-17 19:36:57

CrazedZombie

It's not as much as it seems, 100k minus funeral costs and other estate costs split between 2 kids could be £35k in reality

TheWhiteRoseOfYork Wed 24-May-17 19:57:02

Exactly Kursk, and what if it was split between 3 or 4 kids? It would not even be a reasonable deposit for a house in some areas.

Sionella Wed 24-May-17 20:00:55

Drinking tea - would you think it a good thing if you had a high mortgage and were going to be left in severe negative equity?

drinkingtea Wed 24-May-17 20:09:32

Sionella how good a thing it would be would depend on the severity of course - the impact would probably be gradual, not a sudden overnight bubble bursting.

Do you think it's "good" that house prices are so high that people believe it is normal to need a large inheritance to buy a home?

Instasista Wed 24-May-17 20:12:00

I don't think it will make any difference. It's not as though the housing market is driven by inheritance at the moment is it?

drinkingtea Wed 24-May-17 20:13:06

There have always been winners and losers on the UK housing market - weirdly people always seem to believe that they totally deserve massive unearnt financial gain due to a rising market but that a drop in the market is unfair when it impacts their property value (or that of a property they feel entitled to inherit through accident of birth).

skyzumarubble Wed 24-May-17 20:14:10

The large majority of people I would think don't use an inheritance to buy a house.

Instasista Wed 24-May-17 20:21:17

People talking about giving the "kids" deposits- you do know dementia comes with old age? It's rare for 50/60 year olds to get dementia. How many 80 year olds do you know with "kids"??

ExplodedCloud Wed 24-May-17 20:23:13

This doesn't just apply to dementia though...

AliceTown Wed 24-May-17 20:25:02

I don't know anyone who has bought a house without some kind of inheritance or other payout of some kind.

drinkingtea Wed 24-May-17 20:28:41

That is a very good point Insta

Maybe empty nesters will sell their family homes and downside, freeing up the family homes for families currently stuck in flats or rental properties and freeing up the capital to spend on themselves while still comparatively young and healthy, or share between their children before they reach pensionable age themselves, boosting the economy rather than having everything tied up in over priced under utilised property...

Instasista Wed 24-May-17 20:32:08

Really Alice? That's crazy. I don't know anyone whose parents have died for them to get an inheritance and I'm nearly 40. I know a couple of people who inherited from grandparents but not to buy houses

Whether is specifically dementia or not (agreed it's not- calling it a dementia tax is emotive tabloid fodder) the fact remains the average age to die in this country is early 80s (last pension report I saw was something like 79 for men 84 for women) so their children will on average, be in their late 50s, 60 before they inherit.

prettybaubles Wed 24-May-17 20:34:26

I agree drinkingtea. I do think that that there has been a change in peoples attitude towards property. I think people are less attached to their homes and happier to downsize and move thus freeing up money to spend/give to their children.

I also don't think that councils will be keen to have lots of people in houses waiting for their money to be paid back. They will possibly try and get people to move into homes sooner. As I said on the previous the thread I wonder how many people are aware of lasting power of attorney rules. If an old person has dementia and there is no lpa the council can take over and 'manage' that person care - overriding the spouse. I think it's quite scary!

Shenanagins Wed 24-May-17 20:36:59

The current system means that if you have a house worth £500k, go into a care home, you may only be left with £26k, the rest will go on care home costs which start at around £1k per week.

drinkingtea Wed 24-May-17 20:41:53

Shenanigans if you go into a care home it's your heirs who are left with whatever sum in reality, not you... So any amount after funeral expenses is a totally understand earned bonus surely?

Are you saying the new Tory proposal actually protects more of the heirs inheritance than the current system by stealth though? If so I wonder what the thinking is behind it being painted as doing the opposite...

Shenanagins Wed 24-May-17 20:46:48

From what I seem to understand the new system will be more fair if you never need care in your own home as it means that at least £100k from your estate will be protected. Right now you pay until your last £26k and if that means taking and selling the house to pay they will. They only can't do this if another family member lives in the house, in most cases, the spouse.

AliceTown Wed 24-May-17 20:49:29

Is it right that people with dementia are made to pay for their care whereas people with other illnesses are treated free on the NHS?

The council will apply for deputyship if the person has lost capacity and nobody has come forward to manage their affairs but my experience is that they would rather family manage the affairs and they will liaise with the family to do that.

Instasista Wed 24-May-17 20:53:24

I think so Alice, yes. There obviously isn't money in the NHS firstly, and secondly The care provided is often not medial but basic self care- cooking, cleaning, admin or a care home which is your living costs. etc etc. That's not the NHs' job

Starla268 Wed 24-May-17 20:54:28

It's actually a bit more complicated than potentially only being left with 23k if you move into a care home under the current system. When you have only 23k in assets the council will fully fund your care but prior to getting to that level they will part fund your care on a sliding scale but also taking into account any income you have (pensions, shares and investments etc). It's also the case that currently if your spouse or dependant child (including adult children with disabilities) lives in the property then it's disregarded in the means test.

OP, I totally share your concerns. Some PP have commented that they don't know anyone who has needed an inheritance to buy a property. Well no, you may not do yet. This is a problem for our future generations. Some of my generation (early 30's) already are stuck either living with parents or in costly rented and would only be able to afford to buy when their parents passed. For coming generations, with rising rental costs, tuitions fees and wages falling in real terms this problem will become much more acute and I do fear that with this system many of my children's generation will be stuck unable to buy and at the mercy of private landlords.

drinkingtea Wed 24-May-17 20:54:56

Alice that's a thorny one isn't it, but it isn't the medical treatment or nursing they are asked to pay for, is it? It's the personal and residential home care isn't it? Which few common conditions require long term - dementia patients can be quite physically robust and need years and years of care.

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