What is a Home Reversion Plan?
A home reversion plan is, in a nutshell, a way to only partially sell your house so that you can have money and still keep your home, though there is quite a bit more to it than that.
To get a home reversion plan, you must be at least the age of 65 and own your own home. From there, you choose how much of your home you sell and how much of your home you keep. You can sell any amount of your home from 10% to 100% with the amount of money you get being based off both your age and your health. Generally older people with poorer health get better rates than younger ones.
Whatever you choose not to sell will be sold after your death and money will be given to your family. This amount of money is set up at the time the home reversion plan is set up so you will know exactly how much will be given to yourself, how much will be given to your family, and the rate at which it will be given. All money that comes from this is tax free and will never need to be repaid. There are also no fees on getting this money except for those required to set up and start the home reversion plans.
After the home reversion plan has been put into effect, you still get to live for free in your home for as long as you still live. There never will be any rent or mortgage charges and your claim to your home is protected by an ironclad Lifetime Lease. You still maintain your home as always and are free to fix up and live in your home as you always have. Very little about your day-to-day life will be changed by the addition of a home reversion plan.
Home reversion plans aren’t for everyone. They sometimes can not be transferred to new properties if you move and they can not be cancelled once they have started as your home has already been partially sold to the bank. They are useful, however, for setting up money to help pay inheritance taxes, to help fund retirements when you don’t plan on moving any time soon, and for taking the burden of selling the old family home away from heirs while still assuring they will receive money from the sale of the house.