Retirement Village Cost & Land Lease Community Fees

What is a Retirement Village?

A retirement village is an intentional community designed for older adults who are able to live relatively independently but want the added security and convenience of living in a supportive environment with others their age.

What is a Land Lease Community?

Land Lease Communities are sometimes called “Residential Parks” or “Manufactured Home Parks” since, technically speaking, all the homes are removable. A land lease community is a special type of retirement village that is especially popular in Australia. In a land lease community, the property on which the retirement village is built is leased from the owner, rather than being sold to the residents. This can be a great option for those who want to downsize or move to a retirement village but don’t want to lose the money they’ve invested in their home.

What are the Types of Retirement Village Accommodations?

There are two main types of accommodation available in retirement villages:

1. Independent Living

Independent living units or villas are designed for older people who are independent and do not need special help with day-to-day tasks. These units may be self-contained with their own kitchen, laundry, and garage, or they may be part of a group of units with shared facilities.

2. Supported Living

Supported living units are designed for people who need some help with day-to-day tasks such as cooking, cleaning, and personal care. These units are usually smaller than independent living units and have more on-site care and support available.

What are the Different Retirement Village Costs?

We can classify the different retirement village costs into three broad categories:

1. Ingoing Costs

The ingoing cost is the amount of money you need to pay to have the right to move into the retirement village, including the right to use the common facilities of the retirement community.

In a land lease community, the price you pay upfront is to buy your home and have a leasehold over the land.

Ingoing costs can include a deposit, an entrance fee, and stamp duty.

2. Ongoing Costs (General Service Charge)

The ongoing costs are the regular expenses you need to pay while living in the retirement village. This can include rent, utilities, and maintenance fees

3. Outgoing Fees

The greatest confusion in retirement community costs comes from the exit fee, the biggest part of which is normally the Deferred Management Fee (DMF).

The Deferred Management Fee is a one-off fee payable when you leave the retirement village or land lease community, and it covers the costs associated with preparing your unit for the next resident.

A significant part of your exit fee is likely to be in the Deferred Management Fee. The DMF is normally a percentage of either your original purchase price or the re-sale price, anything between 25% and 40% is common. It may also include a sharing of capital gain with the operator.

What is the Minimum Age Requirement to Live in a Retirement Village?

The minimum age requirement to live in a retirement village is 55 years old.

Is retirement on your horizon? If you’re thinking about downsizing and moving to a retirement village in Australia, it’s important to seek financial advice to ensure you understand all the implications of this decision. Let us help you understand what this change could mean for your future!

What are the Benefits of a Retirement Village?

There are many benefits of a retirement village, including:

Designed for seniors
High level of security
Opportunity for social
interaction
Maintenance-free living
On-site amenities
Care services
Sense of belonging and purpose

RVFA has been working with Australian seniors and their families so we can cut the financial stress that comes with this important yet highly complex life phase.

Our Free Guide

“Your Free Guide to Retirement Village Financial Advice” is a FREE Download that explains how the retirement village system works & covers:

SHAUN GANGULY IS AN AUTHORISED REPRESENTATIVE OF LEISHMAN FINANCIAL SERVICES PTY LTD AFSL 227747. SHAUN GANGULY IS EMPLOYED BY JOURNEY WEALTH PTY LTD ABN 42 634 913 616 WHICH IS PROVIDING ADVICE AND OTHER FINANCIAL SERVICES AS A CORPORATE AUTHORISED REPRESENTATIVE OF LEISHMAN FINANCIAL SERVICES PTY LTD.