Home Reversion Plan

Home Reversion* 

With a home reversion plan you sell all or part of your home to the Home Reversion company in return for a tax-free lump sum, or a regular income, or both. You stay in your home rent free until you either die or move into permanent care.  At that point your home is eventually sold, and the reversion company gets their share of the proceeds from the sale. If you sold all of the property to the Home Reversion company, then they will get all of the proceeds.

Home Reversion Plan Pros and Cons

While a Home Reversion Plan can provide you with a tax-free lump sum it has some disadvantages which may outweigh the advantages and may not be the best options for many clients.

Advantages

• You can continue to live in the property until you die or move into permanent care.
• You will not build up any debt.
• You will know from the outset what percentage of the property will be left to your beneficiaries (heirs).
• There are no monthly repayments
• Depending on the percentage of property you have sold to the Home Reversion company, and the property growth while you are still living in the property, you may be able to take out additional funds in the future.

Disadvantages

• You sell between 25%- 100% of your property to the Home Reversion Plan company which reduces the value of your estate, and your beneficiaries will not receive as much.
• If you die soon after starting the plan, you would have received a below market value price and your beneficiaries will not receive as much as if they sold the property on the open market.  This plan only works well as a long-term plan.
• It is slower to arrange than other forms of finance
• There is a potential impact on means tested benefits if you take a lump sum payment.
• Your beneficiaries can not choose to keep your property after your death.  The Home Reversion plan company will sell the property when you move into permanent residential care or die.

*We do not advise on this but we are happy to recommend you to a third party Home Reversion specialist if you think this is an option you want to consider