Living in a Retirement Village

Living in a Retirement Village

Retirement villages have become an increasingly popular choice for Australians looking to enjoy a supportive community, low-maintenance living, and a sense of security in their later years. But deciding whether village life is right for you involves more than just picking a location — you’ll need to understand the lifestyle, costs, legal contracts, and your rights as a resident.

This guide covers everything you need to know about living in a retirement village in Australia.

Use it to make an informed choice and plan ahead with confidence.

What Is a Retirement Village?

A retirement village is a residential complex designed for people aged over 55 who can live independently but want to enjoy shared facilities and a community lifestyle. It’s not the same as an aged care home — you don’t receive full-time care, but you may be able to bring in home care services if you need extra help.

Retirement villages offer:

• Independent living units, villas, townhouses, or apartments
• Shared facilities like gardens, clubhouses, pools, gyms, libraries, or workshops
• Social activities, clubs, and events to help residents stay active and connected
• Optional support services such as maintenance, gardening, and security

Some villages are large resort-style communities; others may be smaller and more intimate. They can be owned and run by private companies, not-for-profits, or church and community organisations.

Who Is Retirement Village Living For?

Retirement villages suit people who:

• Are generally healthy and independent
• Want to downsize from a larger family home
• Would like to live in a community of peers with similar interests
• Appreciate having social activities and facilities close by
• Value the security and peace of mind of a managed complex

People with higher care needs may prefer aged care homes or supported living arrangements instead. However, many villages are co-located with aged care homes or have arrangements for residents to transition when they need higher levels of care.

Different Types of Retirement Village Contracts

One of the most important things to understand is that moving into a retirement village is very different from buying an ordinary house. The legal and financial arrangements can be complex — so it’s vital to read the contract and get legal and financial advice before you sign anything.

Common contract types include:

• Leasehold: You pay for a long-term lease (often 99 years) instead of buying the unit outright. You may pay an entry contribution plus ongoing fees.
• Licence to Occupy: You pay for the right to live in the unit but don’t own any real estate. This is the most common model.
• Strata or Community Title: You own the unit under strata or community title law and pay fees for shared facilities and services.
• Company Title: You buy shares in a company that owns the village, which gives you the right to occupy a unit.

Typical Costs of Retirement Village Living

There are usually three main categories of costs:

Entry Costs

Most villages charge an upfront payment called an “ingoing contribution” or “entry contribution.” This is often comparable to buying a small house or unit in the local area.

This money is not always fully refundable when you leave — you may have to pay a departure fee (see below) or share any capital gain with the operator.

Ongoing Fees

Residents pay regular fees (weekly or monthly) to cover the cost of village maintenance, staff, insurance, rates, gardening, and other services. These can range from a few hundred dollars to over $1,000 a month, depending on the village and its facilities.

These fees can increase over time — usually in line with the Consumer Price Index (CPI) or village budgets approved by resident committees.

Exit Fees (Deferred Management Fees)

One of the most misunderstood costs is the exit fee, often called the “Deferred Management Fee” (DMF). When you leave the village — whether you sell, move to aged care, or pass away — the operator deducts a percentage of the original or resale price as an exit fee.

This is commonly between 20% and 35% of your entry payment, calculated over time. For example, if the fee is 30% over 10 years, you pay 3% per year for each year you stay, capped at 30%.

Make sure you understand how the exit fee works and what happens if property prices rise or fall.

How the Money Flows: Example Scenario

To see how this works in practice, here’s a simplified example:

• You pay $500,000 to move in.
• You pay $600/month in ongoing fees.
• After 8 years, you decide to leave. The DMF is 3% per year, capped at 30%.
• You sell the unit for $520,000.

Your exit fee is 24% of $520,000 = $124,800. So you get back $395,200 before other costs like reinstatement, selling fees, or agent fees. It’s important to plan for this upfront!

Your Rights and Protections

Every state and territory has laws to protect retirement village residents. These cover:

• Disclosure statements — you must receive a clear statement of all costs, fees, and charges
• Cooling-off periods — you have time to withdraw from a contract if you change your mind
• Rules about how fees can be increased
• Dispute resolution procedures
• Requirements for village operators to maintain facilities to a good standard

Always read the disclosure documents carefully and seek advice. The laws vary by state, so check with your local consumer affairs office or seniors advocacy service.

Choosing the Right Village for You

Moving to a retirement village is a big decision — one you should not rush. Think about:

• Location: Is it close to family, friends, shops, medical services, or public transport?
• Community: Do you feel comfortable with the people, staff, and culture?
• Facilities: Are they what you need now and in the future?
• Rules: Are pets allowed? Can family stay overnight? Are there restrictions on renovations?
• Financial security: Do you fully understand the costs and contract?

Visit more than once, talk to current residents, and get everything in writing.

Everyday Life in a Village

Daily life in a retirement village varies greatly. Some people are highly social and join clubs, fitness classes, or hobby groups. Others enjoy the privacy of their unit but appreciate knowing help is nearby if needed.

Maintenance is generally easier than living in a standalone house. Staff look after gardens, common areas, and repairs outside your unit. This is a big plus for many residents who want a lock-and-leave lifestyle.

Common Myths About Retirement Villages

There are a few common misunderstandings:

• “It’s the same as aged care.” Not true — retirement villages are independent living. You may be able to arrange home care but it’s not nursing care on site.
• “I’ll own my home outright.” Not always — many contracts give you the right to occupy, not freehold title.
• “It’s cheaper than staying in my home.” Sometimes yes — but ongoing and exit costs can add up, so compare carefully.

Getting Good Advice

Before signing any contract:

• Get independent legal advice from a solicitor experienced in retirement village law
• Ask a financial adviser about how moving will affect your pension, taxes, or estate planning
• Speak with friends or family who’ve made the move

Final Thoughts on Living in a Retirement Village

Retirement villages offer a lifestyle that appeals to many older Australians — a balance of independence, connection, and security. But it’s not the right fit for everyone, and the costs and contracts can be complex.

Take your time, visit villages, talk to residents, and read the fine print. With careful planning and good advice, you can make a choice that supports the retirement lifestyle you want.

At OMS, we’re here to help you navigate your options and feel confident about your future. If you’d like a tailored guide, get in touch with our team today.