The retirement living sector is growing rapidly in Australia as the population ages and demand increases for a spot in a retirement village.
For many people, the idea of having someone on site to help with property and garden maintenance is enough for them to make what can be a major change later in life. For others it is about the ready-made community and the easy access to social activities and a network of friends.
And, as developers seek to entice younger and younger residents, they are dialling up the luxury and add-ons.
The type of accommodation varies widely between villages from apartments, villas and houses. Some retirement villages have a resort-style feel with a range of onsite amenities on offer including swimming pools, fitness centres, cinemas and cafes and there are often different dining and cleaning options available for residents.
Research released last year by the Property Council of Australia shows that retirement village residents are 41 per cent happier; 19 per cent less likely to require hospitalisation after only nine months; 15 per cent more physically active; five times more socially active; twice as likely to catch up with family or friends and have reduced levels of depression and loneliness.i
One important factor that sets retirement villages apart from residential aged care facilities is that retirement village living is considered independent living, generally without medical or personal care available through the village itself.
Some residential retirement complexes include both independent living homes and aged care facilities. This set up can make the transition to aged care, if needed, less stressful especially if one member of a couple needs greater care.
However, the two operations are regulated quite separately under different laws and there are no guarantees that you can move smoothly from one to another when you want to.
Unlike assisted living or residential aged care, retirement villages are not regulated by the Federal Government but are governed under state and territory retirement villages acts.
As such, the rules can vary between jurisdictions and villages.
The rules under which retirement villages operate are not as restrictive or controlled as residential aged care.
Buying into a retirement village can be a significant expense, making it important to understand the legal implications and ensure you carry out a thorough check to see if it is affordable.
In most cases you don’t own the village residence. A common arrangement is for a lease or loan type arrangement, where residents buy the right to occupy a home within the village for a specific period.
Knowing your rights and obligations, as well as the initial costs and ongoing fees and expenses are key considerations to a successful transition.
The costs could be roughly what would be incurred if you owned your home. However, you will have less discretion about incurring any expenses.
As well as an upfront price, there could be ongoing maintenance fees and deferred management fees, which reduce the amount you receive when you leave the village.
The level of fees and how they are set is a private commercial arrangement and not governed by any laws.
Financial and legal advice is highly recommended to ensure clear understanding of the purchase arrangements and contracts. Their level of complexity is not to be underestimated.
It is most people’s aim to remain living independently in their own home for as long as possible.
For people living in retirement villages, this could mean accessing government subsidised home care services – for example, through the existing Home Care Packages Program.
Depending on a person’s health, these services could include cleaning and domestic assistance as well as personal care, such as assistance with showering or the delivery of pre-cooked meals.
Following the introduction of recent reforms, a new Aged Care Act aims to increase the subsidies for services and equipment to assist people staying at home.
A new Support at Home Program will replace the Home Care Packages Program from 1 July 2025. The Commonwealth Home Support Program will transition after 1 July 2027.
The reforms also include significant changes to the funding arrangements for residential aged care.
For both home care and residential aged care, the focus will be increasing the quality of services and the rights of individuals, while at the same time looking for greater contributions from people accessing the services.
Retirement villages are largely lifestyle considerations, but you also need to consider your current and future care needs to ensure that the village you choose will remain suitable for at least the medium term.
Contact us to discuss your plans for retirement, including any retirement living needs.
Tips for choosing a retirement village
Visit several retirement villages to compare what is on offer.
Ask the operator for a copy of the village’s disclosure statement, occupation rights agreement and any other relevant documents.
Understand the entry and exit costs as well as the ongoing fees and what they cover.
Check on resident rights – for example, can visitors stay overnight, are pets allowed etc.
Know the expected sale price and whether you receive any of the capital growth.
Are you expected to pay for refurbishment of the unit and how much is this likely to cost?
Are deferred management fees applied?
What happens if you need greater levels of care?
i Seniors’ housing focus required as population ages | Property Council Australia
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