This article discusses the importance of residence capacity – an individual's mental capacity to decide where they should live – and suggests how it should be assessed. People with dementia or intellectual disabilities, as well as those with other mental disorders, are sometimes required to make this decision. Assessments of capacity must be conducted with considerable care, given the implications for the individual and for their human rights. The assessment must be objective and functional: the assessor must be able specifically to demonstrate a lack of decision-making ability. Yet assessments of capacity still require evaluative decisions to be made. We suggest some basic information that should be conveyed to the person faced by the prospect of a change of residence where there is a doubt about capacity.