When a parent moves into a long-term care home in Ontario, one of the first questions families often ask is: “What should we do with their house?”
The answer is not always straightforward.
A move to long-term care does not automatically mean the family has to sell the home. Depending on the parent’s financial situation, family circumstances, health needs, estate plans, and future housing needs, keeping the property, renting it, or selling it may all make sense.
There are also important considerations around long-term care costs, property taxes, insurance, maintenance, power of attorney, estate planning and potential tax consequences.
If your parent is preparing to move into long-term care, this guide explains the major issues to consider before making a decision about their Ontario home.
Important: This article is for general information only and is not legal, tax, financial or medical advice. Every family’s circumstances are different. Speak with a qualified Ontario lawyer, accountant or financial professional before making significant decisions about a parent’s property.
Does Moving Into Long-Term Care Mean the House Has to Be Sold?
No.
Moving into a long-term care home does not, by itself, require a parent to sell their existing home.
A parent may choose to keep the property for several reasons. For example, they may have a spouse or partner who continues to live there. The family may expect the parent to return home. The property may be rented to generate income, or the family may simply want to preserve it as part of the parent’s estate.
On the other hand, maintaining an empty house can become expensive and stressful.
Mortgage payments, property taxes, insurance, utilities, repairs, lawn care, snow removal and general maintenance can add up quickly.
That is why the decision should be based on the parent’s overall financial and family situation rather than simply assuming that the home must be sold.
Understanding the Cost of Long-Term Care in Ontario
Ontario long-term care residents generally pay a co-payment toward accommodation and meals. The amount depends on the type of accommodation—basic, semi-private or private.
As of July 1, 2026, Ontario’s maximum long-stay accommodation rates are:
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Basic: $70.00 per day, or $2,129.17 per month
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Semi-private: $84.40 per day, or $2,567.17 per month
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Private: $100.01 per day, or $3,041.97 per month
These rates are set by the Ontario Ministry of Long-Term Care. Residents receive the same level of care regardless of room type. Additional optional services, such as cable television, telephone, internet, transportation and hairdressing, may cost extra.
For residents who cannot afford the basic accommodation rate, Ontario also has a Long-Term Care Rate Reduction Program. Eligibility depends on factors including income and dependants, and residents generally need to apply through their long-term care home.
This means families should look at the parent’s complete financial picture before deciding what to do with the house.
Option 1: Sell the House
Selling the home may be the simplest solution in some situations.
If the parent is unlikely to return home and there is no spouse or other family member who needs the property, selling can eliminate ongoing ownership costs and create cash that can be used for the parent’s expenses.
The proceeds could potentially help with:
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Long-term care accommodation costs
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Property taxes and other expenses
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Medical and personal expenses
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Professional care or support
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Other financial obligations
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Estate planning objectives
Selling can also remove the burden of maintaining a vacant property.
However, selling a parent’s home is a major financial and emotional decision. The family should not rush into a sale simply because the parent has moved into long-term care.
The property’s tax history, ownership structure, mortgage, estate plan and intended use of the proceeds should all be reviewed first.
What About Capital Gains Tax?
A common concern is whether selling the parent’s house will create a large tax bill.
If the property qualifies as the parent’s principal residence, the principal residence exemption may eliminate or reduce the capital gain for income-tax purposes. However, the exemption has specific rules and does not automatically apply to every property or every year of ownership.
The CRA explains that a principal residence can include a house, condominium, apartment and certain other housing units. Generally, the property must qualify under the principal-residence rules for the relevant years.
Another important point is that selling a principal residence still involves tax reporting requirements. The CRA states that a disposition of a principal residence generally has to be reported even where the gain is fully sheltered by the exemption.
If the house has been rented out or used partly to earn income, the tax situation can become more complicated.
Before selling, have an accountant or tax professional review the property’s history.
Option 2: Keep the House
There are situations where keeping the home makes more sense.
For example, if a spouse remains in the home, selling may not be practical at all.
A parent might also want to retain the property because they hope to return home someday, because another family member lives there, or because the family believes the property will form an important part of the estate.
But keeping a property comes with ongoing responsibilities.
Someone needs to manage:
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Property taxes
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Home insurance
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Utilities
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Repairs
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Lawn and garden maintenance
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Snow removal
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Security
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Plumbing and heating
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Regular inspections
An empty home can also develop problems that go unnoticed for weeks or months.
Before deciding to keep the property, calculate the annual cost of ownership. Compare that cost with the home’s likely long-term value and the parent’s financial needs.
Option 3: Rent Out the House
Renting the property can be another possibility.
Instead of selling the home immediately, the family may decide to rent it and use the rental income to help cover the parent’s expenses.
This can be particularly attractive in a situation where the family believes the property may be valuable in the future but does not want to leave it vacant.
However, becoming a landlord also creates additional responsibilities.
The family needs to consider:
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Finding and screening tenants
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Preparing the property for rent
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Managing repairs
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Paying property expenses
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Understanding Ontario tenancy rules
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Reporting rental income
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Understanding potential tax consequences
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Deciding who will manage the property
Rental income may also affect the property’s tax treatment. A change from personal use to income-producing use can create tax considerations, so professional advice is worthwhile before renting the property.
The CRA has specific rules dealing with changes in the use of a principal residence and income-producing property.
What Happens If the Parent Has a Power of Attorney?
Power of attorney can become especially important when a parent is no longer able to manage financial decisions independently.
A continuing power of attorney for property may allow another person to manage financial and property matters on the parent’s behalf, depending on the document and applicable law.
However, having power of attorney does not mean the attorney can simply treat the parent’s property as their own.
The attorney has legal duties and must act appropriately for the person they represent.
For example, if the family is considering selling the house, the attorney may need to consider the parent’s interests, financial requirements and existing estate plan.
This is one reason families should avoid informal arrangements such as transferring ownership to a child simply because the parent has entered long-term care.
An Ontario estates lawyer can explain what authority the existing power of attorney provides and what steps are required before selling, renting or otherwise dealing with the property.
Should You Transfer the House to the Children?
Families sometimes consider transferring ownership of the home to a son or daughter after a parent moves into long-term care.
This can appear simple, but it can create significant legal and tax complications.
A transfer may affect:
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Capital gains tax
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Land transfer tax considerations
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Estate planning
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Ownership rights
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Creditor exposure
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Family disputes
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Future sale of the property
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Eligibility for certain benefits or programs
There can also be consequences if the child already owns a home or if multiple people are placed on title.
Do not transfer ownership simply to “protect” the house without first obtaining independent legal and tax advice.
What appears to be a straightforward family arrangement can have consequences that last for many years.
What If the Parent Has a Mortgage?
A mortgage does not disappear when someone moves into long-term care.
If the parent keeps the house, the mortgage payments generally continue according to the loan agreement.
If the house is sold, the mortgage normally needs to be discharged from the sale proceeds.
If the parent has limited income, the family should determine whether the ongoing mortgage is sustainable.
This is another reason to prepare a monthly cash-flow calculation before deciding what to do.
Look at the parent’s:
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Pension income
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Old Age Security
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Guaranteed Income Supplement, where applicable
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Investments
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Bank accounts
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Rental income
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Long-term care costs
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Mortgage payments
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Property taxes
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Insurance
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Other regular expenses
A clear financial picture often makes the property decision much easier.
Don’t Forget Home Insurance
One issue families sometimes overlook is insurance.
A home that becomes vacant or is occupied less frequently may have different insurance requirements.
Simply assuming that an existing home insurance policy will continue to provide exactly the same coverage can be risky.
Before the parent moves out, contact the insurer and explain the situation.
Ask about:
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Vacancy requirements
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Unoccupied-home coverage
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Inspection requirements
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Water damage coverage
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Heating requirements
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Liability coverage
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Rental-property coverage if the house will be leased
The correct insurance arrangement will depend on the circumstances.
What Happens to the House When the Parent Dies?
If the parent eventually dies while living in long-term care, the property becomes part of the estate unless ownership has already been transferred or another ownership arrangement applies.
The executor or estate trustee may then need to deal with:
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The mortgage
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Property taxes
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Insurance
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Utilities
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Repairs
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Personal belongings
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Sale of the property
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Distribution of the estate
Tax considerations also arise when someone dies.
The CRA explains that a deceased person’s principal residence may qualify for the principal residence exemption, but the property and the deceased person’s tax return still need to be handled correctly.
This is why a well-organized estate plan can make a significant difference for the family.
What Should Families Do Before the Move?
Ideally, the property conversation should happen before the parent moves into long-term care.
Start by gathering the important documents:
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Property deed/title information
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Mortgage statement
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Home insurance policy
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Property tax information
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Utility accounts
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Will
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Power of attorney documents
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Investment and bank information
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Previous tax records
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Information about renovations and major improvements
Then make a realistic assessment of the property.
Ask:
Is anyone living there?
If a spouse or another family member is living in the home, the decision may be very different from a completely vacant property.
Can the parent afford to keep it?
Calculate the annual carrying costs rather than guessing.
Is the parent likely to return home?
The answer may influence whether selling immediately is appropriate.
Would renting make financial sense?
Compare realistic rental income with taxes, insurance, repairs, management and other expenses.
What does the estate plan say?
The property may have been intended for a particular beneficiary or may be subject to other estate-planning considerations.
A Simple Decision-Making Framework
There is no universal answer to the question, “Should we sell Mom or Dad’s house?”
Instead, consider these five questions:
1. Does anyone still need the home?
If a spouse or dependent lives there, keeping the property may be the obvious choice.
2. Can the parent comfortably afford it?
Calculate the actual monthly and annual costs.
3. Is the home likely to appreciate enough to justify keeping it?
Future property values are never guaranteed, so don’t base the decision solely on expectations of appreciation.
4. Would renting solve the problem?
Rental income can help, but being a landlord has costs and responsibilities.
5. What does the parent want?
Most importantly, remember that this is your parent’s home.
Where the parent has the capacity to make their own decisions, their wishes should remain central to the conversation.
Frequently Asked Questions
Does my parent have to sell their house when they enter long-term care in Ontario?
No. Moving into long-term care does not automatically require the sale of a parent’s home. The family can consider keeping, renting or selling it depending on the circumstances.
Does owning a house mean my parent cannot receive long-term care?
Owning a home does not automatically mean a person cannot enter an Ontario long-term care home. Long-term care accommodation involves a resident co-payment, and Ontario provides a rate-reduction program for eligible residents who cannot afford the basic rate.
Can we rent the house after the parent moves into long-term care?
Potentially, yes. However, renting can create landlord, tax, insurance and property-management responsibilities. Obtain appropriate professional advice before making the change.
Is the house automatically tax-free when it is sold?
Does owning a house mean my parent cannot receive long-term care?
Not necessarily. If it qualifies as the parent’s principal residence, the principal residence exemption may eliminate or reduce the capital gain. However, specific CRA rules apply, particularly if the property was rented or otherwise used to produce income.
Can a child sell the parent’s house using power of attorney?
It depends on the authority granted under the power of attorney and the circumstances. A power of attorney should be reviewed by an Ontario lawyer before a significant transaction involving the parent’s home.
Final Thoughts
A parent moving into long-term care is a major life transition. For many families, the house represents much more than an asset—it may be the place where decades of family memories were created.