Consider a lifestyle change among NY resolutions

HAPPY New Year! The end of one year and the start of another becomes a time of reflection.

People start off a fresh new year resolving to do many things – most of which don’t last as long as we would like.

Common resolutions involve losing weight, getting healthy, being more financially astute and generally doing things better in the year ahead.

One thing of relevance to over-50s  is whether current accommodation is suitable. Consideration of whether to downsize is often prompted by family discussions over the Christmas period.

Elder Law staff spend plenty of time assisting people into retirement villages.

People do, and should, buy for lifestyle rather than investment.

However, they need to understand that buying into a retirement village is very different to buying and selling a house in the way they have been used to throughout their lives.

Retirement villages provide  different ways of creating rights to  reside in their properties.

There are a number of ways that a retirement village can offer tenure to an incoming resident:

1. Leasehold – this is the most common way that retirement villages offer their properties to incoming residents. The lease contract creates a right to reside for an extended period (usually 99 years – though we are yet to see someone outlive their lease). A lease is registered in the Titles Office. There is no stamp duty. Sometimes there is capital gain, but not always.
2. Licence – less common than leasehold (at least in Queensland), a licence creates a right to reside but is not registered against the title deed. However, there are additional protections under The Retirement Villages Act. Usually there is no capital gain. There is no stamp duty.
3. Manufactured/relocatable homes – this model involves owning the house, but not the land. The resident pays a site rental to have a house on the land owned by the operator. Because you own the home, there is usually capital gain available. There is no stamp duty.

Whatever the ownership model, all retirement village contracts set out extensive rules in relation to occupation of the home in which you live.

There are always ongoing fees while you are in the village.

With retirement villages, there are usually significant fees payable at the end of the ownership period – called various names including exit fees or deferred management fees.

Retirement village contracts are always very long and complex. Specialist advice should be sought before entering into a contract for any type of retirement village arrangement.

 Sunshine Coast & Brisbane Elder Law staff are experts in all forms of retirement village contracts. Call 1800 961 622 or visit sunshinecoastelderlaw.com.au or brisbaneelderlaw.com.au