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Lifestyle communities – the Ingenia difference

For many active retirees, making the most of their retirement lifestyle involves a move to a lower maintenance home. A home designed with this in mind can be found in over 55s communities, or retirement villages, or gated estates. Deciding which option is best for your circumstances will involve understanding the various financial arrangements these communities have in place, as it is quite difference to a normal home purchase.

The Ingenia difference

Comparing Lifestyle Communities and Retirement Villages

Retirement financial expert Rachel Lane explains: ‘A lot of people look at downsizing to either a lifestyle community or retirement village. However, they are quite different and the costs can be hard to compare. My advice is to break it down to the ingoing, the ongoing and the outgoing charges.

‘The ingoing cost is most often a one-off payment. For a retirement village it secures your right to reside in the home and use the common facilities. In a land lease community the ingoing price is to purchase the home but lease the land on which it sits – so the resident is both a homeowner and a tenant at the same time. Generally no stamp duty applies to the purchase of a new home in either model.

‘The ongoing costs apply to both a retirement village (as a general service charge), and a land lease community (as a site fee). Residents pay the ongoing costs on either a weekly or monthly basis to cover the running of the community, maintenance of the facilities and rates. Since residents in a land lease community are also tenants, most pensioners would be eligible for rent assistance on their site fees.

‘The outgoing costs are incurred when you sell your home. Typically these are called exit fees also called deferred management fees (DMF). The majority of land lease communities do not charge exit fees and the resident receives 100% of any capital gain. However exit fees are standard in traditional retirement villages and calculated as a percentage (anywhere between 25% and 40%) of the purchase price or resale price. There can be sharing in capital gains with the village operator to factor in as well.’

You can find a helpful cost comparison called Comparing Retirement Villages to Lifestyle Communities is like Apples and Oranges here.

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