What's wrong with selling a house you don't live in?

[Kendodd]

On the back of the NI increase.
If an elderly person living alone moves into a care home, well, why wouldn't they sell their house anyway? They're not going to be going back to live there, the house would be sitting empty and we don't have enough houses for people to live in. The elderly person would then also have a huge amount of money to supplement their income in their last few years. As far as I can see the benefits for everyone far outweigh any reasons for keeping the house.

For what it's worth, I don't think there should have been an NI rise or people paying a fortune for their own care. I think inheritance tax should have been increased instead. I don't get the outrage about selling houses nobody lives in though.

I don't have any issue with selling houses to pay for care. Care is expensive and its not possible to expect the tax payers to pay for all of it. I do disagree with inheritance tax though - people work all their lives and pay tax on those earnings., then pay interest on mortages and then want their children to benefit from what they have worked hard for and accrued - and yet the tax man double dips on inheritance tax.

@Unfashionable

I work in this field and just today had a family member quite aggressive saying why should my father have to sell his home, so he shouldn’t have worked all his life then and saved should he, he should’ve been a council tenant and then you’d pay.

My parents make the same argument. They stared with nothing, worked very hard, scrimped, saved & went without to buy their own home, paid off their mortgage and now own it outright. They know plenty of people who lived in council houses but drove better cars & had better holidays than they did. If those people needed care, the state would pay. If my parents needed it, they would have to pay themselves. The profligate & irresponsible who ‘pissed their money up the wall’ would be rewarded. The thrifty & prudent who did the right thing would be punished. How is that fair?

Your missing a massive point here... the peers of your parents will have absolutely no choice in where they are placed (and there are some awful homes about). It will be decided for them based on coatings. Irrelevant of whether it is closest to family connections etc. If you have money or assets you have choices/options. It's a huge advantage. People just don't want to see it cos they have this idea that because they own a house they should be able to pass it on as inheritance. They may never need care 🤷🏼‍♀️ but it's the risk you take in being financially secure. They should have minimal outgoings in retirement whereby their peers will be paying rent until the day they die if they don't need care 🤷🏼‍♀️ it's all a lottery

legenderyready it's a personal thing. I do not wish to be a burden to my dcs or anyone else. Once I am immobile or with dementia, my life is pointless. Its an existence.

People are obsessed with leaving money when they die. My mil lives in a housing association house , so doesn't have property to sell . She has about 25k in savings that she wants to pass on to 4 people. 2 are her own children , and not in need of the £10,000 or thereabouts . The other are gc , again adults , and whilst not as settled financially as first two will basically piss theres up the wall . In both cases it will be gone on months. The mil scrimps , only buys low end food , never buys clothes , watches every penny to maintain the money she wants to pass on.

@upthekyber
You have it absolutely spot on. I see a lot of homes due to my job and the level of care/cleanliness and feeling of home is vastly different. Assets and money mean choice. It's a massive advantage. Yes it's expensive but do we really want to inherit money over seeing our loved ones in the best place possible in the final years?? Because I absolutely do not want inheritance money over good care. We are in the will of 3 people (my parents, DH mum and DH dad who are divorced). We may get some inheritance or none at all, but I don't even think about it, it's not my money and I don't feel entitled to it although I appreciate the sentiment that they want to 'leave something behind'. There seems a massive expectancy these days they we should leave something behind and we should gain something from a relatives death and I just don't get it all really!

@ittakes2

I don't have any issue with selling houses to pay for care. Care is expensive and its not possible to expect the tax payers to pay for all of it. I do disagree with inheritance tax though - people work all their lives and pay tax on those earnings., then pay interest on mortages and then want their children to benefit from what they have worked hard for and accrued - and yet the tax man double dips on inheritance tax.

For a single person the threshold is £325,000 or £500,000 if left to children and for a couple this doubles - so up to a million

So double dipping is unlikely to impact on many people. To be double taxed they would have to pay for care and still have an estate left above £1 million (or £500,000 if single) . It is then charge only on the value above this threshold.

[quote OldScrappyAndHungry]@elbea I haven’t done this because I don’t believe in it. Inheritance tax is a fair tax in an equitable society. If everyone tried to get out of paying it we’d be even more up shit creek than we are .[/quote]
Well said. I paid £200k for my house. It's now worth nearly £700k. Frankly, I only worked gor that first £200k, the rest is pure luck. If I live as long as my parents my DC will be well into their 60s by the time I pop my clogs, anything I leave is more likely to fund their card in old age than provide a house deposit.

@starfishmummy

Life’s unfair but the kids know not to bank on inheritance because it’s not a given

Unfortunately not all kids feel the same. I know someone whose parents house has been referred to as "his inheritance" for decades since one of his parents died. He's not joking. He sees it as his right.

This entitlement confuses me so much. He may have a big shock coming his way! I have a friend who talks about when they inherit her MILs house and the renovations they plan to make to make it more liveable for their DC... How do they know the DCs will still be of living at home age when/if they do inherit? And why make plans for your future based on an inheritance that may not be there? I think like the guy you know, there has been an open discussion for a long time that the house is inheritance in the will and therefore it's just expected now. Well the FIL has dementia now, and if the MIL died he would have to go into care at this point (unless someone in the family took him in) as he wouldn't be able to look after himself safely. So who knows what will happen in this case but I certainly wouldn't be making my future family plans around it!!!

[quote elbea]@OldScrappyAndHungry it’s perfectly legal, every single wealthy person in this country has tax planned long in advance of their death.

A perfect example is James Dyson, he is one of the biggest farmers in the UK with Beeswax Farming. He didn’t just fancy being a farmer, he’s bought up huge swathes of the countryside as farmland pays 0% IHT. Why wouldn’t normal people take advantage of legal tax planning when the wealthy do.[/quote]
Well, if they complain about lack of services they are hypocrites. I don't think much of James Dysons morals either.

Mil went into a nursing home march 2020 on the first day of lockdown. We sold her bungalow in the August.
The distress this caused her made us regret selling it while she was still alive. She has full faculties.
Even now she asks what we did with such and such even down to the shower curtain as she loved that colour.
But remember whether we sold the bungalow before or after her death she would still have to pay for her care.
So I can understand why families leave a place empty.
You need to remember that any person will be upset at loosing something that they have lived in for a long time.

Self funders in care homes already pay an enormous extra fee to support the residents who are funded by the state. My parents and PIL all paid between £3k and £3.5k per month, the LA paid half that fee for residents not self funding. I would consider that a fairly large tax.
I personally would be prepared to sell my property to fund care. I have been fortunate to have an education and a career and own (a mortgaged) property. But we should remember that self funders are not just paying for their own care.

Honestly...
I look at that London suburbs house my parents bought in the 80s, on one salary... and my parents in failing health in late sixties/early seventies... and think 'at least they will be able to afford a good care home'. And feel relieved.

I worry more about my brother who lives with them and helps with all their hospital appointments etc.

'If working and saving and buying a house and maintaining the house only means that house is then sold to pay care home fees...why bother? Why not spend all your money or actually, why work so hard'

Well in this day and age buying a home is cheaper than renting more often than not, it also provides long term security (ie, no landlord that can turf you out at their discretion). The aim of the mortgage is that you pay it off eventually, which means some rent free years to ease the burden in later life. And this is why it's still more desirable to be a home owner (along with the care options I mentioned in my PP)

People live too long with ill health. That's the main issue. We used to be lucky to get to 65, now we have 80 - 90 year olds with alzheimers stuck in care homes for decades. If we could sort that out the social health bill would go down and the need to sell assets would be alleviated.

I think it needs pointing out that having money does not necessarily bring choice. Mil had advanced dementia and no “nicer” home would accept her.

Furthermore, the fees at a more desirable place might be extremely high, such that after two years your funds are running low. The council will not pick up the tab for you to continue to stay there; you will have to move to a cheaper care home.

@SuperCaliFragalistic

Well, that obviously makes lots of sense and I agree with you. But some people want to have their cake and eat it.

⬆️

It’s deeply unfair when, for example, a working person with 3 kids would be expected to sell their house and downsize to cover the costs of being made redundant.

@SuperCaliFragalistic

Well, that obviously makes lots of sense and I agree with you. But some people want to have their cake and eat it.

I agree.

It's the same old: I want...and I want someone else to pay for it.

Your brother really needs to think about what he will do if the house has to be sold. If his name isn't on the deeds he won't be allowed to stay, or take any money from the sale.

I agree, @FreeBritnee . The quality of mil’s life for ten years was hideous. Doubly incontinent, moved in a hoist, no knowledge of who her family were or even who she was. But she could be kept alive, so she was.

My problem with inheritance tax is that for the vast majority of people it is a tax on already taxed wealth. Most people hit aren't vast land owners, they're home owners in the south east. Why shouldn't someone choose what happens to the products of their taxed income?

So people who have been prudent and spent wisely have to lose what they have earned while the feckless who have lived off the state all their lives get everything for nothing.

Doesn't seem right to me. We are offloading cash and assets to our DCs. As much as is legal.

My father managed to hang on to the family home when he went into a nursing home. He wanted us to live in it after the years of creating a beautiful garden.

Many people in the home with him were paying nothing. Not right not fair.

@roarfeckingroarr

My problem with inheritance tax is that for the vast majority of people it is a tax on already taxed wealth. Most people hit aren't vast land owners, they're home owners in the south east. Why shouldn't someone choose what happens to the products of their taxed income?

It's not though. For the vast majority it's tax on property gains on which no tax at all has been paid.

Maybe that's the answer, not inheritance tax on the whole estate but a capital gain type tax?

I work in Adult Safeguarding. At least once a month we get a referral where an elderly person is not receiving adequate care at home and it becomes clear that the family are trying to save as much money as possible in order to protect inheritance.

I think we need a culture shift, with people accepting that they need to be prepared to pay for social care when it's required. It should become part of our retirement planning.

However that's a long term thing and it's clear something needs to be done in the short and medium term. But increasing taxes for the poorest in society is not it.

The argument about "people having to work hard all their lives" to own a house doesn't convince me. They got to live in the home - it wasn't an abstract savings scheme.

@Puddstalk

The older generation have paid tax and NI in their working days - this funded the younger generations health care, education and social care, while I agree it was easier with no university fees (although less people went to university in the past) and easier to get on the housing ladder - it’s a circle, I wonder how many complaining now will change their minds when it’s their turn to need care. It’s not the rich who need this help they have inheritance planning so would never lose “everything” it’s the middle income people who have saved and bought their own home - I don’t feel that it’s too much to ask - we pay a little extra now and we will benefit in the future.

@Puddstalk but why should we collectively pay more to protect the inheritance of those middle income people's descendants!? Not everyone will have anyone to inherit off, but they are still expected to pay? I'm not against paying for decent social care, but I am against the idea that houses should be able to be sitting empty for years while care is being provided for someone who is never going to go home.