Moving to a retirement village or over 55’s community is not an investment choice, it’s a lifestyle choice that an increasing number of Australians are embracing. Australians are making these choices to maintain their independence and the happiness that comes from being part of a supportive community.

So, why are retirement villages and over 55 communities so complicated, confusing and controversial?

A major contributor to the complexity is the range of different legal structures that have developed over time and which now exist together. Legal agreements such as company title, unit trust, strata title, community title and manufactured home villages are now common and co-exist with the traditional loan/lease arrangement.

Another major contributor to the complexity is the fact that each state and territory has its own retirement village legislation, and the legislation can be quite complicated because it has to contend with all of these different legal structures.

Despite the various ownership structures and names used, the key difference between over 55 communities and retirement villages is with the loan, licence or lease arrangement. For over 55 communities, the agreement is over the land. In retirement villages, the agreement is over the building.

Being an owner-occupier and a tenant at the same time poses a unique set of circumstances for people living in these communities. Traditionally for over 55 communities, there has been no stamp duty, entry fees or exit fees and many residents have qualified for government rent assistance. However, some of the newer villages now charge a Deferred Management Fee (DMF) or exit fee on the sale of the home.

What should be considered?

  • Think about the type of village you wish to live in and what you can afford on a continuing basis.
  • Keep in mind size and the levels of accommodation offered by the village (ranges from self-contained independent living to serviced apartments and aged care facilities).
  • Don’t rush into making a commitment. Seek expert advice and ask questions to ensure you understand the financial implications of owning a unit in a village.
  • Assess the culture and social side of the village to ensure it meets your expectations.
  • Become familiar with the village’s policy on guests, pets, and seek information on security and the health and lifestyle programs available.
  • Check the communal facilities available in the village to ensure it fits in with your lifestyle.
  • Request a copy of the village rules before you move in.

Help is available

Housing for the Aged Action Group

This independent, government-funded group supports older people with accommodation matters. It provides information on housing options for older people who need to find better, more affordable and secure accommodation.

Seniors Information Victoria

This government-funded organisation provides free information to older Victorians about housing options, from independent living to residential care.

Positive ageing – NSW

The NSW Seniors Information Service provides older people and their families and carers with information on the range of services and options available to them.

Getting the right financial advice

If this is something that you or a member of your family is considering, getting the right financial advice can help you to understand the costs by:

  • identifying the fees and charges that apply
  • evaluating the affordability in the short and long term
  • determining entitlements to a government pension and other benefits
  • providing a comprehensive analysis of the available options

By First State Super (firststatesuper.com.au)