The HSE no longer takes a share of it under the financial assessment. But the exemption only applies if the property is registered with the Residential Tenancies Board (RTB), meets minimum rental standards, and is genuinely the resident's principal private residence. 

 

Families looking to apply for the Nursing Home Support Scheme in Ireland need a clear plan for what happens to the tenancy when the resident dies, because a tenant doesn't have to leave just because the landlord has. Get the process right, and an empty house becomes a source of income instead of a worry. Get it wrong, and you can end up with a vacant property, a confused tenancy, or a delayed sale.

 

What is the “Empty House” Problem Many Fair Deal Scheme Users Relate To? 

When a parent moves into long-term residential care under the Fair Deal Scheme, the family home may remain unoccupied for an extended period. This can leave families with a practical decision: keep the property vacant or consider renting it out while the parent is receiving care.

Leaving a property empty can mean ongoing maintenance, insurance and security responsibilities, while renting it can provide an income and keep the property occupied. However, families may hesitate because becoming a landlord brings its own legal and administrative responsibilities.

There was also an important Fair Deal question. Families often wanted to know whether rental income from the home would be taken into account when calculating the parent’s contribution towards nursing home care. There were also concerns about what would happen to the tenancy and property if the parent later died, particularly where the family intended to sell the home.

The Rule That Changed Everything: 100% Rental Income Exemption Since February 2024

Before 2024, renting out the family home under the Fair Deal Scheme in Ireland came at a real financial cost. 

 

  • Rental income from a resident's own home was assessed, and a large share of it went towards the cost of care, which left many families asking whether renting was worth the hassle at all.

 

That changed on 1 February 2024. Under the updated rules, nursing home residents can keep 100% of their rental income from a principal residence. It is no longer partly assessed towards nursing home costs. 

 

Now, the precise scope of this exemption is subject to certain rules. 

 

  • Only principal residences are eligible for this advantage.  
  • Any investment property, second holiday home or inherited assets are still treated as ordinary income and assessed.
  • RTB registration is required. The tenancy must be registered with the RTB unless it falls under a specific exemption from registration. 
  • The Fair Deal Scheme applicant must have lived in the property immediately before moving into nursing home care. 
  • The property must already be recognised under the scheme's asset assessment and 3-year cap rules. 
  • Unlike the 3-year cap, nursing home residents have to apply to avail of the scheme, subject to their eligibility. 

 

The Conditions Attached: What the HSE and RTB Expect

The 100% exemption is generous, but it isn't unconditional. Before a family sees the benefit of it, several boxes need ticking:

 

  • The property must meet minimum rental standards. A house that's sat empty for months or years, possibly with an ageing kitchen, outdated wiring, or damp issues, will usually need work before it can legally be let. This is where the "renovate or lock the doors" decision becomes very real.

 

  • A written tenancy agreement is essential. The HSE application asks for the rental agreement showing the start date and rent amount, so an informal cash arrangement with a family friend won't satisfy the requirements.

 

  • Full documentation must go to the local Nursing Homes Support Office. This includes the RTB approval letter, the tenancy agreement, and, where relevant, the latest Notice of Assessment from Revenue.

 

  • Even unregistered tenancies may qualify in limited cases. Families can still apply to have rental income exempted even where the home isn't RTB-registered, though the RTB should be contacted directly for advice on when this applies — this is a narrower exception, not a general workaround.

 

None of this is designed to trip families up, though it does highlight the fact that exemption rewards preparation. A family that registers with the RTB, signs a proper lease, and keeps the paperwork organised from day one will move through the process far more smoothly than one relying on a handshake agreement with a neighbour's son.

 

How to Apply for the Exemption

The exemption isn't automatic. Families need to actively apply for it, and the paperwork matters. The application requires the Principal Private Residence Rental Income form, along with supporting documents, including the RTB registration approval letter and the rental agreement showing the commencement date and rent amount. Missing documentation is one of the most common reasons applications stall, so it's worth gathering everything before submitting.

 

Talk to a Fair Deal Scheme Advisor Before You Make a Decision 

The rental exemption is one of the most family-friendly changes to Fair Deal in years, but it rewards families who plan and penalises those who wing it. Getting the RTB registration wrong, missing a piece of paperwork, or letting a tenancy run without an exit strategy can turn a sensible decision into a stressful one at exactly the wrong moment.

 

This is where working with a fair deal scheme advisor in Ireland earns its keep. A good advisor will confirm whether the property qualifies as a principal private residence, help assemble the HSE application correctly the first time, and map out how a future sale and tenancy termination would work together. 

 

If you're weighing up whether to renovate the family home or leave it locked while a parent is in care, speak to an advisor who works with the Fair Deal Scheme every day before committing either way.