Retirement villages and communities designed for over 60s explained

To keep it simple, here are the key lifestyle differences and the different fees for homeowners involved in purchasing a retirement village vs a community designed for over 60s.

Legislation

•  Retirement Village: Regulated by the relevant services such as Retirement Villages Act in each state and territory.
• Community Designed for Over 60s: Operate under legislation in each state and territory. In New South Wales, it is the Residential (Land Lease) Communities Act 2013. You own your home and the land tenure is secured by a Site Agreement, which is guaranteed by State Government legislation.

Ownership

• Retirement Village: There are different tenure agreements such as Strata Title, Loan Lease, Leasehold or Loan License. Due to the leasehold tenure offered, finance is not typically available for the purchasers of homes or units within retirement villages and facilities.
• Community Designed for Over 60s: The homeowner purchases their home and signs a lease to pay rent on the freehold land, which remains the property of the operator.

Product Type

• Retirement Village: Typical standard residential accommodation product including separate dwellings, attached villas and apartments with adapted door widths and other alterations.
• Community Designed for Over 60s: Allowable product types differ by planning region, however theoretically all dwellings are to be moveable and assembled on site.

Government Assistance

• Retirement Village: In relation to the Assets Test for the Pension, a lease is treated the same as if you owned the title to the property.
• Community Designed for Over 60s: As with Retirement Villages, however for those eligible for a pension, rental assistance from the Government for site fees may also be available.

Costs

• Retirement Village: The main costs include; the initial purchase price, monthly service fee, deferred management fee or exit fee, capital gain sharing and reselling fees.
• Community Designed for Over 60s: The main costs include the initial dwelling cost and ongoing site fee. There are benefits such as no exit fees (deferred management fees) or refurbishment costs, no capital gains sharing and no stamp duty payable.