Once the kids have moved out, your once bustling home can feel empty and …a little too quiet? If you’re energetic and enjoy an opportunity for a chat or activity, what does this mean for the longer term?
Perhaps it’s time to start taking the glossy over 55s property marketing more seriously.
With so choices competing for your attention, the whole exercise can feel daunting. As with any significant life decision, a well informed decision is always the best decision.
A lifestyle community is not the same as a retirement village and vice versa. Why should this matter, and why is it important that you can differentiate between the two?
Here is what you need to know before making a decision between buying into a retirement village versus a lifestyle community.
Update 16 January 2017: note from author based on reader feedback
Please note, the purpose of this article is to help raise awareness about the importance of doing your research and seeking professional advice before making any significant investment. The legislation and contractual terms and conditions differ based on:
- which state or territory based legislation the accommodation you are considering falls under
- the type of title, license or lease that the contract binds you to
- the operator or developer you are entering into an agreement with.
This article is not claiming to be legal advice but is based on the author’s interpretation of independent research. It was intentionally written without bias toward one type of accommodation over the other.
What are the benefits of moving into an over 55s residential community or village?
If you’re keen to enjoy your later years, selling up to move into a ready-made over 55s residential community is a lifestyle choice you might want to indulge in.
Making the decision to move into a residential development designed for seniors and retirees can be an attractive option.
Over 55s accommodation is purposefully designed to enable more:
- Opportunities for leisure, socialising, sports, hobbies and holidays because costly and labour intensive property maintenance is taken care of.
- Social opportunities, events and activities – both organised and informal – within walking distance, or a shared bus ride away.
- Neighbours that share similar lifestyle aspirations. Marketing of over 55s accommodation is targeted to attract people just like you!
- Resort style facilities such as indoor heated swimming pools, bowling greens, bars, libraries and gymnasiums just to name a few.
- Security features to reassure you and your family as you age. Property developers plan over 55s villages and communities with security in mind. Security features such as well lit paths and roadways, 24 hour by 7 day a week emergency systems, security entries, mobility friendly floor plans and shared infrastructure, can be reassuring.
- Conveniently located access to shopping centres, medical centres and hospitals and public transport.
Both lifestyle communities and retirement villages offer most, if not all, of these benefits – and more.
What is the difference between a lifestyle community and a retirement village?
When you are planning to invest in the next phase of your life based on finite funds, it is essential you make well informed decisions.
Marketing of over 55s residential communities can blur which consumer protection legislation you’ll be covered by.
Understanding the differences between a retirement village and a lifestyle community (also known as lifestyle village, over 55s community or residential park), can help you avoid potential hazards.
Well sourced information and professional advice will ensure that you make the best decision to protect your future and your investment.
Differences between a retirement village and lifestyle community driven by state or territory legislation
There are a number of differences between a retirement village and a lifestyle community, in terms of legal structure; the legislation they fall under in each State or Territory; and the benefits they offer those living there.
For example, in New South Wales, retirement villages fall under the Retirement Villages Act 1999 whereas lifestyle communities fall under The Residential Parks Act 1998.
Both Acts have certain provisions in place around the rights and responsibilities of residents and operators. This includes rules around conduct of residents and operators; contractual terms and conditions including cooling off periods and breaches of contract; maintenance of shared grounds and facilities; and rights and responsibilities when it comes time to sell.
While both Acts roughly cover similar provisions, the provisions differ significantly. The differences are driven predominantly by the type of residency you are buying in to.
Lifestyle communities are broadly governed by the same legislation that applies to mobile home and caravan park residents – legislation that is more closely aligned with a tenancy agreement.
Retirement villages are generally governed by legislation that is more closely aligned with strata title property ownership.
This means that some of the key differences between retirement village residency and lifestyle community residency is:
- In some instances you may pay stamp duty when you buy into a retirement village villa or unit depending on the title, leasehold or licence – the type of title varies according to the state or territory legislation and your individual contract with that particular retirement village.
- In a lifestyle community you own the building and pay weekly or monthly rental on the site the building sits on. For this reason, stamp duty is not applicable.
- Because you are effectively renting in a lifestyle community, you may be able to apply for rental assistance; you can’t apply for rental assistance to help cover maintenance fees in a retirement village.
- In a retirement village, depending on the contractual agreement you enter into, in some instances you may keep some or all of any capital gain, minus any deferred management fees.
So, the most important question you need to ask first when considering buying into a retirement village or lifestyle community is which state or territory consumer protection legislation you will be covered by.
Once you’re clear on your residency rights, your next challenge is to understand that each developer or operator will have a contractual agreement unique to that development.
As with signing any contract that commits you to a significant investment, make sure you understand the terms of the contract before signing.
Yes, this article is only scratching the surface. Understanding the options for over 55s accommodation is complex and can be baffling. Fortunately, quality industry operators are aware of this and are increasingly working to simplify communications, marketing and contractual terms and conditions.
Given the lifestyle rewards for those that aspire to the benefits of living in over 55s communities, investing time upfront in understanding what you’re signing up to is worthwhile.
Always, always, always seek expert advice from a legal adviser that is knowledgeable about retirement living choices.
Whatever decision you make, it is important that you fully understand what you’re signing up to, and that you are aware of your rights. Protect yourself, and you can enjoy a future free of unnecessary worry.
16 Comments
Completely inaccurate so far as South Australia is concerned, and I believe all other states.
A Retirement Village does not offer freehold title, it offers License for Life which is a form of tenancy. There is no stamp duty.
It is true that in some few respects a retirement village resembles a strata title entity. What is important is to work from the Retirement Village laws in your state. In SA, there is an Act, some Regulations, and a Good Practice Guide.
Disappointing that this writer has contributed to confusion that already is a nuisance.
Thank you for your interest. From researching the minefield of legislation available in each state and territory of Australia, it appears that retirement village leasehold titles in South Australia, New South Wales and Queensland are exempt from stamp duty. The intention of this article was to raise awareness that a retirement village or lifestyle community contract is not a ‘one size fits all’ and requires deeply considered research and professional advice. I have intentionally reiterated throughout the article that prospective residents 1) understand that state and territory legislation around retirement villages; and lifestyle communities, differs and importantly 2) to always, always seek legal advice. Choosing where you live in your later years is a decision that can’t be taken lightly. I will take your comments on board, and revise in light of the intent of the article.Thank you again for your interest.
It’s interesting how you said that you should look at your residency rights before moving into a retirement villa. Knowing exactly what you might end up having to pay for would be important to do before actually moving in. That way you can plan appropriately with your funds and not be surprised by any fees or anything like that for moving.
Attn: Marketing Director
I have the domain names:
http://www.Over55sLifestyleVillage.com and
http://www.Over55sLifestyle.com which are For Sale.
I thought you might be interested in buying one, or both, of them?
Regards, Tony
investmentdomains.biz@gmail.com
no thank you
This article in inaccurate information. I’m a NSW resident who bought a strata title unit in an over 55’s. I stayed 3 years. I lost 37 and a1/2% when I moved out. Most residents there wanted to leave but couldn’t afford to lose so much money. I lost $80 000 in the move but I gained more than that when I once more gained autonomy, security and peace of mind. While there, services, paid for in village levies, decreased dramatically. The problem for any appeal was we didn’t come under retirement village legislation. Eventually a NZ development company bought it (the third change of operator in as many years) and it appear conditions are far worse, far too many to cover here.
I wonder who paid for this article to be written? It’s so inaccurate it reads like an advertisement.
Caroline, thank you for your comments. As a freelance writer, I work across a very broad range of industries. I am paid by go55s.com.au to write independent content that is relevant to an over 55s demographic. The intent of this article and the reasearch behind is unbiased and independent and I’m sorry that you feel that this is not the case. This article was researched and written based predominantly on the information available via Consumer Affairs websites, and the legislation that covers the different types of retirement accommodation available to seniors in Australia. The intent was to provide ‘consumer beware’ information about being vigilant about understanding individual contracts and the consumer legislation the developer is bound by – before entering into a contractual agreement. The over 55s strata title contract you signed up to, would differ from one say, down the road – or one interstate. Always seek independent legal advice before signing up to any binding agreement. I did try to make this clear in the article. I’m sorry to hear of your experience in New South Wales.
Dear Sir /Ms.
We are in a small gated village over 50th’s ( 112 Manufactered homes ) our social club wants to become incorporated, there are quite a few people that disprove of this as it would require a lot of red tape, we are only running the bar 4 hrs a fortnight and occasionally open for a social night dinner.
Are we not entitled to serve two liquor drinks,without being licensed? Would a restricted liquor permit ( RLP ) not be better suited for us?…could or would you be able to shed some light on this please .
We have a free standing clubhouse with bar facilities,theatre pools room ect. Warm Regards Con #0437128488
Is this still the same these days or has things changed? We are thinking of the over 55’s Village not retirement homes.
Is there somewhere where we can read the legislation regarding these properties?
Hi Julie,
I live in an over 55’s lifestyle village on the north coast of NSW.Can you please tell me the situation if a husband and wife wish to buy into such a village and the husband is over 55,but his wife isn’t?There are already instances in the village where one person is over 55,but the other isn’t.The current managers could not clarify this issue today.My belief is that only one person has to be over 55, not both, to be able to purchase into the village.As there are already residents in the village who are in this situation hasn’t a precedent been set?I would appreciate your thoughts please.
Has anyone any ‘up-to-date’ thoughts on lifestyle resorts in Queensland, particularly those in the SE of the state within 100kms of Brissie?
The problem with this is over 55’s village model is you basically are buying the right to use the land on which your home sits. Maybe $100-200 a week in fees and in return the use of the wonderful pools, clubhouse and facilities. We now live in (post COVID economy) a world where financial collapses are real. What happens when the operator goes bust and all the facilities close, the pool goes green and the gardens stop being maintained? You dont have a title as in a house of apartment/unit or rights of body corporate. If the actual landowner goes broke you could lose everything. Many of the houses (even if you technically own it) are not transportable and where to?
Sunday 23/8/2020 I’m Karin of ADELAIDE south Australia (=SA)
I‘m Asking on behalf of 2 good Lady Friends.
One is 54 and is soon moving into a Lifestyle Villsge Soon in the Northern Part of Adelaide, while the other one I’d 78 and wants to move into a Retirement Village as soon as possible. I NEED ALL THE ADVICE I CAN GET FOR BOTH LADIES Karin 0416 999 813 Thanks in Advance Karin
I didn’t realize that in some instances you may get to keep some or all of your capital gain in a retirement village. My parents are thinking about moving into a 55 and older, and are trying to figure out what all of their options are. I will have to let them know about a retirement village and see what they think about it.
Can you please tell me regarding the below scenario
Disabled daughter 40 years old Mother and father 60+ They are all co owners under caveat in a community living complex, if the mother or father or both pass away is the daughter who is not over 50 be evicted and property to be sold. What is the law and where can I obtain the rules and regulations regarding this scenario. Thank you
If you live in an over 50s community, can my children fro down south come to stay with me of a while.