Home Reversion Plans
What is a home reversion plan?
Home reversion plans are a type of equity-release scheme that lets you use some of the money that’s tied up in your home. You could use this to pay for your long-term care, but only if you’re looking to stay in your home. With a home reversion scheme, you sell all or part of your property at less than its market value in return for a tax-free lump sum, a regular income, or both, but stay on in your home as a tenant, paying no rent.
Home reversion plans are one of the two main types of equity release. The other is a Lifetime mortgage. Home reversion plans are high-risk products. They could have major implications for tax, benefits, inheritance and your long-term financial planning. You should always get independent financial advice before taking out a home reversion plan or any other kind of equity-release scheme. This will help you find out whether it is appropriate for your personal needs and circumstances.
How do home reversion plans work?
With a home reversion plan you sell all or part of your home in return for a cash lump sum, a regular income or both. When your home is eventually sold, the reversion company gets their share of the proceeds of the sale. If you sold the entire property to them they will get all of the proceeds. If you sold part of your home, say a half, the reversion company gets that share of the proceeds, leaving the rest to go towards your inheritance.