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Time is right to consider retirement village options


Time is right to consider retirement village options

This is the time of year when seniors typically consider whether the time is right to consider downsizing from the big family home to more appropriate accommodation, writes DON MACPHERSON. Moving to a retirement village is not the same as buying a house.

People start the New Year resolving to do many things, most of which only last a week or so.

Consideration of whether to downsize is often prompted by family discussions over the Christmas period.

We spend a lot 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.

Different retirement villages provide different ways of creating rights to reside in their properties. There are a number of ways that retirement villages offer tenure to an incoming resident:

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, although we are yet to see someone outlive the lease).  A lease is registered in the Titles Office. There is no stamp duty.  Sometimes, but not always, there’s capital gain.

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.

Manufactured/Relocatable Homes:  This model involves owning the house, but not the land. One pays a site rental to have one’s house on the land owned by the operator. Because you own the home there is usually capital gain available.

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 in the village.

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 long and complex. Specialist advice should be sought before entering into a contract for any type of Retirement Village arrangement.

 Don Macpherson is an expert in elder law.  Call Sunshine Coast Elder Law 1800 961 622 or visit

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