Retirement Villages

Retirement Villages usually offer to prospective residents either a Contract to purchase a Villa or alternately a Lease to occupy a Villa. Villages have different requirements in this regard.


Should a Village offer a Lease, then usually this comprises a 99 year Lease. The occupier would enter into the Lease, and pay an in-going contribution fee, which is similar to a purchase price. There is usually an annual rent fee, which is typically a nominal fee. Further there are usually recurrent fees which are payable monthly to the Village as well a personal care fees if you should wish to utilise this service.

In regard to the in-going contribution fee, this money is paid to the Village for the Village operators use. You have rights under the Lease to terminate the Lease and the usual provisions in this respect are:

  1. End of the lease period – 99 years
  2. Death of the occupier
  3. Your surrender of the Lease
  4. Termination of the Lease by the operator – this would be for non-compliance of the Lease conditions

The most usual reasons for the Lease to terminate are death of the occupier or your wish to leave the Village and therefore your surrender of the Lease. The surrender of the Lease usually occurs when the occupant wish to move to a facility offering more services and care, eg. Nursing home or hostel accommodation.


At the time of terminating the Lease then you have the in-going contribution repaid to you.

However, it is important to investigate the repayment of the in-going contribution prior to entering into the Lease.
Some Villages take a large portion of the in-going contribution if you have not resided in the Village for ten years prior to your decision to terminate the Lease, others do not.

 The repayment of the in-going contribution will also be subject to your recurrent charges being paid up-to-date.

Further the Lease will have provisions in relation to capital gains and capital losses. Some Villages apportion part of the capital gains to the occupier, some do not, each Village is different in this regard. The same situation occurs with capital loss.


In respect of recurrent fees, this is usually charged on a monthly basis by the Village. The fees are used to cover the expenses of operating the Village generally. Leases provide for either an annual or bi-annual review of increasing the recurrent fees. Most Villages cap the reviewed figure to 10% variation.

Additionally some Villages offer services such as meals, cleaning of the villa, a courtesy bus, hairdressing, beauty care, personal services as well as visiting medical and associated services. It is usual practice that should an occupier take advantage of any of these services, then the responsibility for payment of the service falls to the occupier.

Further expenses such as telephone, electricity and gas are the responsibility of the occupier.


Most Villages require all occupiers to be absent from the Village for a period of 12 weeks before deeming that an occupier is not able to return to the Village, but again each Village has their own ruling in this regard. However should there be a planned absence from the Village such as extended holidays, etc. then notice should be provided to the Village.

If the Village feels that an occupier may be at risk, eg not able to care for themselves, then certificates from two medical practitioners nominated by the Village will be required. If a determination is made that the occupier is not able to care for themselves, then a termination of the Lease will follow.

The attitude of keeping of pets should be discussed with the Village operators prior to signing the Lease. Again each Village is different and some will allow a small dog or cat, whereas other Villages will not.

Finally, it should be noted that in relation to ingoing costs, the stamp duty payable in relation to a Lease is vastly reduced compared to purchasing a Strata Title lot. This is a big incentive this difference can save occupiers many thousands of dollars in government fees.


Some Villages offer prospective residents the opportunity of purchasing their Lot which is part of a Strata Plan.

The advantage there is that the resident will hold an individual title deed which is registered into their names.

Should the resident wish to move from the Village, then they can sell their villa and apart from the usual sales agents commission, the owner can retain all sale proceeds, together with any capital gain or loss.

Of course the owner will be bound by the provisions set out by the Strata Plan Body Corporate Owners, of which the resident will be a member.

The owner will be responsible for payment of council and water rates as well as Strata Levies.

Prior to or upon settlement it will be necessary for the owner to pay ad valorem stamp duty upon the Contract and Transfer. Depending on the purchase price it can be many thousands of dollars.

However, it needs to be considered that unlike the in-going contribution in a Lease situation where some monies are usually retained by the Village at the time of termination of Lease, in a sale situation all of the sale proceeds will be returned to the owner.

Ready For a Fast Settlement?


I cannot recommend Lorraine and her staff highly enough, I have used them twice now and the process was made so easy, always on hand to answer any questions, emails answered quickly.
Thank you again for your expertise.
Sarah Kenyon

 Lorraine and her team have worked with me on several sales and purchases. They always kept me informed through the entire process and made it a stress free exercise, I would like to thank them for all their hard work
Greg Kampas