Retirement villages and over 50s communities explained
To keep it simple, here are the key differences and the different fees involved in purchasing in a retirement village vs an Over 50s community.
• Retirement Village: Regulated by the relevant Retirement Villages Act in each state and territory.
• Over 50s Community: Operate under legislation in each state and territory. In Queensland, it is the Manufactured Homes (Residential Parks) Act 2003. You own your home and the land tenure is secured by a Site Agreement, which is guaranteed by State Government legislation.
• 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 a retirement village.
• Over 50s community: The homeowner purchases their home and signs a lease to pay rent on the freehold land, which remains the property of the operator.
• Retirement Village: Typical standard residential product including separate dwellings, attached villas and apartments with adapted door widths and other alterations.
• Over 50s community: Allowable product types differ by planning region, however theoretically all dwellings are to be moveable and assembled on site.
• 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.
• Over 50s community: As with Retirement Villages, however for those eligible for a pension, rental assistance from the Government for site fees may also be available. At the time of publishing, this may be up to $61 a week for a couple and $65 a week for a single person.
• 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.
• Over 50s community: The main costs include the initial dwelling cost and ongoing site fee. There are no exit fees, no capital gains sharing and no stamp duty payable.