Let's clarify a few things here.
1) Your objective is to look after your parents, so you move into their house.
2) You move your family as well.
3) You don't know how long this will last.
4) You don't know if it will work out or not. You or your children or your spouse fight with your parents and it becomes unworkable.
So the solution is relatively simple. Don't make it complicated when it does not have to be.
5) You move in and you rent out your house.
- This keeps all your options open if it does not work out
- You keep a stake in the property market
- The inheritance is not impacted
- The Fair Deal Scheme is not impacted
- You have a rental income with which you can pay down your own mortgage quicker.
Sure the government has discouraged landlords, but, on the other hand, most tenants are decent and rents are very strong right now. And it's easier to get tenants out if you want the house for your own family's needs.
6) After a few years, you review things and you might decide to sell your existing home.
But it never really makes sense to buy your parents' home from them. You end up with a big mortgage which is expensive and they end up with cash earning nothing and which causes them problems with the Fair Deal.
7) When your parents die, you sell your old home and buy your parents' home if that is still where you want to live.