What to do with your parent's home — funding care and assets

When a family begins to fund care or a setting, the question of the home almost always comes up. There is no single right answer — it is a personal decision that depends on the family's situation, on taxation, and on entitlements. This page reviews the options and the questions worth asking; it is not financial or legal advice, and it does not recommend a course of action or any particular provider. For the decision itself, it is worth consulting an independent professional.

The link: assets and the co-payment

The parent's assets can affect the co-payment for funding a setting under the Ministry of Health code — the income test weighs assets and income too. So the question of the home is not separate from funding the care. We do not calculate the personal co-payment — see how much a care setting costs and who helps fund it and the official Ministry of Health calculator.

Under Ministry of Health circular 8/2018, if the patient or the spouse owns a home in which no dependant lives, the rent (or an estimate of the rent) is added to the income in the calculation — even if the home is not rented (from two months after admission). If a property was transferred to a relative without consideration less than five years before the application, admission is conditional on the relative's undertaking to pay an amount equal to the rent value.

Four options — what each involves

• Selling — releases a sum that can fund care or a deposit (פיקדון, pikadon) in sheltered housing. You need to take taxation into account (betterment tax, exemptions) and the effect on eligibility.
• Renting out — a steady income that helps with the monthly funding, without giving up ownership. You need to take rental-income taxation and property management into account.
• A reverse mortgage — a mechanism in which the owner receives a loan against a lien on the home, with no ongoing repayments, and the debt and the interest are repaid later (for example on a sale). In Israel similar products are offered, sometimes under another name (for example a "pension mortgage"), and their terms differ: check what exactly is offered, if anything, and consult an independent advisor before committing. Important to know: the debt grows over time and reduces the inheritance.
• Keeping it for the children — not touching the home and funding the care from other sources. This too is a legitimate option, with its own implications for the funding cash flow.

What is important to know

• There is no single "right" way — the comparison depends on taxation, on eligibility for the Ministry of Health code, and on each family's needs.
• Questions worth clarifying: the effect on the co-payment, taxation, and the rights of the parent and the family.
• Before a decision — independent legal and financial advice. We do not calculate what is worthwhile and we do not recommend an instrument or a provider.

Sources

• Ministry of Health Director General circular 8/2018 (in Hebrew, PDF)
• Ministry of Health — nursing code calculator
• Mizrahi-Tefahot Bank — reverse mortgage and pension mortgage
• Israel Tax Authority — guide for sellers of real-estate rights 2026 (betterment tax and exemptions) (in Hebrew)
• Israel Tax Authority — tax tracks for rental income from a residential apartment (in Hebrew)
• National Insurance Institute — long-term care benefit and rights
• Portal guide: how much a care setting costs and who helps fund it
• Scenario: when there is not enough money for a care setting — funding and rights