How Long Can You Keep the Family Home After Moving Into Aged Care?

When a parent moves into aged care, one of the very first questions families ask is: "Do we have to sell the house — and how long can we keep it?" It's a practical question, but it's rarely just about property. It's about timing. It's about money. And often, it's about letting go of a place that holds a lifetime of memories.

I remember sitting at my kitchen table with a real estate agent's card in one hand and a list of phone numbers in the other, feeling completely overwhelmed by the sense that we needed to make a decision immediately. Nobody had told me that wasn't true. Nobody had told me we actually had time.

So that's where I want to start with you today — because the single most important thing I want you to hear is this: you don't have to rush.

The Short Answer: No, You Don't Have to Sell Immediately

There is no rule in Australia that says you must sell the family home the moment a parent enters residential aged care. In fact, many families keep the home for months — sometimes years — after that transition. What most families don't realise is that the Australian aged care system actually builds in time for you to make this decision thoughtfully, rather than under pressure.

But — and this is the part that matters — how long you keep the home, and in what circumstances, can significantly affect aged care fees and Centrelink assessments. So while you don't have to decide today, you do need to understand the rules well enough to plan sensibly.

Let's walk through it together.

Why the Family Home Matters in Aged Care (More Than You Might Think)

The family home isn't treated the same way other assets are in the aged care means-testing system — at least not immediately. It plays a role in:

• Aged care fee calculations (specifically the Means Tested Care Fee)
• Age Pension and Centrelink assessments
• Decisions about how to fund the Refundable Accommodation Deposit (RAD) or Daily Accommodation Payment (DAP)
• Long-term financial sustainability for your parent's care

This is exactly why families feel so much pressure to "get it right." There is real financial consequence to the decisions you make — but there is also far more flexibility than most people realise, especially in the early months.

When the Home Is NOT Counted (At Least Initially)

In many situations, the family home may be temporarily exempt from aged care means testing. This exemption can apply in the following circumstances:

A Spouse or Partner Still Lives in the Home

If your parent's spouse or partner continues to live in the family home, the property is generally not included in the aged care means assessment while that situation continues. This is one of the most common scenarios, and it provides significant protection — both financially and emotionally.

A Dependent Relative Lives There

If a dependent relative (as defined by legislation) is living in the home, similar exemptions may apply. The specific rules here can be complex, so it's worth getting advice if this is your situation.

An Eligible Carer Has Been Living There

In some circumstances, a carer who has been living in the home may qualify for an exemption. This is less common and has specific eligibility requirements — and is definitely an area where a specialist aged care financial planner can give you clarity.

If none of these apply — if, for example, your parent was living alone and has now moved into residential care — the home is still treated differently to other assets, but the exemption period becomes particularly important to understand.

The Key Timeframe: The Two-Year Exemption Period

For many people entering residential aged care, the value of the family home is generally exempt from the aged care means test for up to two years after the date of entry.

This is sometimes called the "home exemption period" and it exists precisely to give families breathing room. It means:

• You can choose to keep the home during this time without it affecting care fees in the same way
• You have the space to make a considered decision, rather than a panicked one
• You are not forced to sell on someone else's timeline
• The home may still be treated favourably in Centrelink and fee assessments during this window

Many families use this period to let things settle emotionally, to understand their parent's long-term care needs, to explore financial options, and to avoid the kind of rushed decisions that tend to lead to regret.

What Happens After Two Years?

Once the two-year exemption period ends, the situation changes. Depending on individual circumstances, the home may begin to be included in aged care means testing — which can affect the Means Tested Care Fee your parent pays. This is where the financial implications become more significant, and where having good specialist advice becomes even more important.

What this looks like in practice depends on factors including whether anyone continues to live in the home, whether the home has been rented out, the assessed value of the property, and your parent's overall financial picture. This is genuinely not the kind of calculation you should be trying to do on your own — it's one of those areas where a conversation with a specialist aged care financial planner can make an enormous difference.

Do You Have to Sell the Home to Pay for Aged Care?

This is the question I hear most often, and the honest answer is: not always. But sometimes, practically speaking, it is the most sensible option.

Families typically consider selling when:

• Funds are needed to pay a Refundable Accommodation Deposit (RAD) — which can be hundreds of thousands of dollars for some facilities
• Ongoing care fees exceed available income or savings
• The property is no longer being used and the ongoing maintenance costs feel pointless
• The family has agreed it is the right time emotionally

But selling is not always the only way. Some families choose to pay a Daily Accommodation Payment (DAP) instead of a lump-sum RAD, which means the home doesn't need to be sold immediately. Others find that their parent's income and savings are sufficient to cover ongoing costs without touching the property at all — at least in the short term.

Every situation is different. This is genuinely one of those areas where speaking with an aged care financial planner — someone who specialises in this specific area — can make an enormous difference to the options available to your family.

The Three Options Most Families Consider

1. Keep the Home (For Now)

This is the most common approach in the early months. It allows time to adjust emotionally, understand care needs and costs, and make decisions without pressure. It's often the right choice when a spouse or partner still lives there, when the family isn't emotionally ready, when care needs are still being clarified, or when the property is within the exemption period and fees are manageable without the sale proceeds.

2. Sell the Home

Selling often makes sense when the proceeds are needed to fund care, when ongoing maintenance costs outweigh the benefit of keeping the property, or when the family is genuinely ready to close this chapter. It's worth understanding the Centrelink implications before you do this — because the sale proceeds will affect your parent's pension assessment. Our Aged Care Costs Explained guide covers this in plain English.

3. Rent the Home

Some families generate rental income from the property rather than selling — which can help cover care fees while preserving the asset. But rental income may affect the Age Pension, can influence aged care means testing, and there are tax implications to consider. This is an area where specialist financial advice is particularly important before you commit to anything.

The Emotional Side That Nobody Really Talks About

Even when the decision is purely practical on paper, it almost never feels that way in real life. The family home isn't just an asset — it's where birthdays happened, where Sunday dinners were made, where Christmases were celebrated for decades. It's where your parent was most themselves. And deciding what to do with it carries all of that weight.

Families often feel guilt about selling, pressure to decide quickly, real disagreement between siblings about the right path, and a deep attachment to the house that goes far beyond its market value. All of that is completely normal. All of it deserves to be honoured — which is exactly why I encourage families to take the time the system allows, rather than rushing to a decision before they're ready.

I also want to gently name something that comes up a lot: sometimes one family member is pushing to sell quickly, and another wants to hold on. This is one of the most common sources of family tension during the aged care journey. Getting clear, independent financial advice can sometimes help take the decision out of the realm of "family argument" and into "here are the actual facts and options" — which is a much easier place to have the conversation from.

A Simple Timeline to Guide Your Thinking

The First Few Months

Focus on the transition into care. Help your parent settle. Understand the fee structure. Don't make any permanent property decisions yet — unless there is a genuine and urgent financial need, in which case please get specialist advice before you act.

The First Year

By now you'll have a much clearer sense of your parent's ongoing care needs, the actual costs involved, and how sustainable the current arrangement is. This is a good time to start a conversation with an aged care financial planner — not to be pushed into a decision, but to understand your options clearly before you need to act.

Before the Two-Year Mark

This is when you need to have made a considered decision — or at least to understand clearly what the financial implications of your current situation will be once the exemption period ends. Being prepared before that date means you're choosing, not reacting.

Why Specialist Financial Advice Matters Here

Aged care finance is genuinely complex. It sits at the intersection of social security law, aged care legislation, taxation, and estate planning — and the rules change regularly. A general financial adviser may not have the specific expertise to navigate this well.

I strongly encourage every family navigating property decisions in aged care to speak with an aged care financial planner — someone who specialises specifically in this area and holds relevant accreditation such as the Accredited Aged Care Professional (AACP) designation. They can:

• Model out the financial implications of keeping, selling, or renting the property
• Help you understand the impact on the Age Pension and Centrelink payments
• Clarify how different options will affect aged care fees both now and after the exemption period
• Help you understand RAD vs DAP options and which makes more sense for your parent's situation
• Give you a clear, personalised picture so you can make genuinely informed decisions

This is not an area to navigate on general information alone. A specialist planner can give advice specific to your parent's financial situation — and that advice can make a very significant difference to the outcomes for your whole family. You can find accredited aged care specialists through the Financial Advice Association Australia (FAAA).

Common Questions Families Ask

Can we keep the house indefinitely?

You're not required to sell. But keeping a property indefinitely can have increasing financial consequences over time, particularly after the two-year exemption period. Understanding what those consequences are for your specific situation — before you commit to a long-term "keep" decision — is genuinely important.

What if a sibling wants to buy the family home?

This scenario comes up quite often, and it can work well — but it needs to be done carefully and with proper legal and financial advice. A sale to a family member at below-market value can have significant Centrelink and means-testing implications. Always get advice before proceeding.

What if my parent's situation changes and they come home?

If your parent is able to return home (which sometimes happens, particularly after short-term respite), selling the home prematurely could create real difficulties. This is another reason not to rush into a sale in the early months.

Does the home need to be sold to pay for a RAD?

Not necessarily. Many families choose to pay a DAP instead of a lump-sum RAD, which avoids the need to liquidate assets immediately. A specialist aged care financial planner can model which option makes more financial sense for your parent's situation.

A Final Word

Deciding what to do with the family home is one of the biggest decisions you'll make during the aged care journey. And it often arrives at a time when you are already exhausted, already overwhelmed, and already managing more than feels possible.

Please remember: you have time. Use it wisely. Don't let urgency — real or perceived — push you into a decision you're not ready to make.

And please, get specialist advice. Not because the situation is impossible to understand, but because the stakes are high enough that having an expert in your corner is genuinely worth it. Someone who does this every single day, who knows the rules inside out, and who can give you a clear picture of your actual options — that is invaluable at this stage of the journey.

You don't have to figure this out alone. You just have to take it one step at a time.

With so much love,
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