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Comparing Retirement Villages to Lifestyle Communities is like Apples and Oranges

Downsizing to a retirement community can be an exciting time, but it pays to do your research and crunch the numbers.

by Rachel Lane

There are so many different terms used by operators, from the more traditional “retirement village” or “over 55s community” to the more contemporary “gated community”, “lifestyle resort” and even “aged care”. While it may seem that there are too many different financial arrangements to compare, the reality is that most retirement communities are either a Retirement Village or a Land Lease Community, and the differences are important.

I find it easiest to break down the numbers into the Ingoing, the Ongoing and the Outgoing.


In a retirement village the ingoing is the price you pay for your right to occupy your home and use the common facilities. In a land lease community the price you pay upfront is to buy your home and have a leasehold over the land. There are often no stamp duty fees to pay on the purchase of a new home in either model.


In both a retirement village and a land lease community residents need to pay a weekly or monthly fee to cover the running of the community, its facilities and the rates. In a retirement village this is often called a “general service charge” or “recurrent charge”, in a land lease community it is called site fees. It is not uncommon for the site fees in a land lease community to be higher than the general service charge of a retirement village.

Because of the unique ownership structure of land lease communities, most pensioners qualify for rent assistance on their site fees. In a retirement village, pensioners need to pay an amount below a certain threshold (currently $203,000) to be eligible for rent assistance.


The greatest confusion comes from the exit fees, also called deferred management fees (DMF). Generally, when selling your home in either a retirement village or land lease community you’re likely to incur fees – typically agent’s fees and marketing expenses, it may also include the cost of repairs or improvements to your home.

But where you are likely to find the biggest difference is in the exit fee charged by the retirement village versus the land lease community. While some land lease communities do charge exit fees, the majority don’t. In a retirement village exit fees are standard. The exit fee is likely to be a percentage of either you purchase price or re-sale price, anything between 25% and 40% is common. The exit fee may also include a sharing of capital gain with the operator.

Let’s have a look at how a house in an Ingenia Lifestyle community compares with a similar home in a retirement village when you exit after 10 years.

Ingenia Lifestyle Retirement Village
$450,000 $450,000
Site Fees $180p.w General Service Charge $130p.w
*Rent Assistance $62p.w** Rent Assistance $0
Assumed Capital Growth @3%p.a
Value in 10 years time $604,762 Value in 10 years time $604,762
Assumed Selling costs @ 2.5% $15,119
What you get back
$589,643 $377,262#

* For people who are eligible to receive an Australian Income Support Payment.

** Figure based on a couple

# This figure is based on the assumption of a Retirement Village exit fee, which is a Deferred Management Fee of 30% of the original purchase price and 50/50 share of capital gain.

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