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Renting or Owning

In Australia there are both ownership and rental opportunities for retirement living options. Generally the deciding factor of whether you rent or buy is subject to your financial situation.

In Australia there are different ownership and rental opportunities for retirement living options (Source: Shutterstock)
In Australia there are different ownership and rental opportunities for retirement living options (Source: Shutterstock)

Ownership & legalities

Property ownership in retirement villages comes under slightly different legislation to normal home ownership. They have different forms of legal title and occupancy rights, and other costs such as stamp duty may or may not apply.

Types of tenure

The various forms of occupation or ownership rights of retirement villages are referred to as ‘tenure’. They will include provisions for resident consultation about the management of the community and the use of the village facilities.

The legal forms of tenure for buying into retirement villages are:

Leasehold estates: The owner/developer continues to own the property, however you pay the market value of the unit in exchange for a period of time (49 - 199 year lease). This is generally the most common form of tenure used by ‘for profit’ developers.

Licences to occupy: The village developer or owner gives you a licence to occupy your unit which means you are permitted to stay under certain conditions such as not altering the property or surrounding gardens. This form of tenure is generally the most common used by ‘not-for-profit’ developers.

Company share arrangement: The village is still owned by the retirement village developer who sells you shares which entitle you to live in your unit. Although some retirement villages do use this tenure, it is not a common form.

Strata title ownership: Similar to regular strata-title schemes where the property is divided into units, this operates as a direct ownership structure. You pay the agreed purchase price, are registered on the title deed and become a member of the owners’ corporation. However unlike regular strata, the retirement village operator may have to approve you as a resident and you sign a management contract with the village owner.

This is not a common form of tenure for retirement villages.

NB: In South Australia, while Strata Title does still exist, divisions no longer occurred after June 2009. Community Title was bought in to replace it. Existing Strata Corporations were not affected by the change.

Community title ownership: This is a very rare form of tenure for retirement villages and operates on a direct ownership structure similar to strata, except in community title, the land is divided into ‘Lots’.

Ongoing costs

Even though you have paid the market value for your property under the different tenures, you will still have ongoing costs and fees to pay in addition to your regular utility bills and in some villages, council tax.

These additional costs are sometimes known as service or maintenance fees and cover costs for the village management and maintenance.

View Village Costs and Fees

Always read the resident’s handbook and take legal and financial advice so you fully understand what you are buying into, what your responsibilities are and what additional costs you will need to pay.

Rental units

Some residential villages do offer accommodation rental units, (sometimes known as periodic tenancy) but these are generally reserved for people with limited financial resources and are usually income assessed.

Because of this rental units are often in high demand and you may have difficulty finding one.

Where do I find a rental unit?

Rental units come in all shapes and sizes, and can be found in both small and large villages or retirement living complexes.

The main providers of rental accommodation for seniors are non-profit organisations such as religious, charitable and other benevolent organisations and local councils. However, the private sector is beginning to develop purpose built rental accommodation for seniors.

How much is the rent?

You will generally be charged a rental that is a percentage of the age pension plus maximum rent assistance available from Centrelink (regardless of whether you are receiving the age pension or rent assistance.)

What services do rental developments offer?

Rental developments may offer the following services:

  • Self contained units with quality fittings
  • The provision of all meals
  • Laundry services
  • Communal facilities
  • Social activities
  • Secure environment
  • Independent lifestyle

Government legislation

There is legislation to protect the rights of retirement village residents, but this is regulated by the individual states and territories.

The legislation for state and territory Retirement Acts can be found by clicking on the following links:

Some states and territories also have Resident Associations who can help with advocacy, legal aspects and also promote the rights of Residents to all levels of government.

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