No Exit Fees, No Surprises: What You Keep When You Downsize With Hometown

Retirement should be a time of financial confidence, not a time spent worrying about what happens to your money when you leave your home. Yet for thousands of Australians living in traditional retirement villages, exit fees quietly erode the wealth they've spent decades building. These fees are often buried in complex contracts and only become fully visible at the point of departure, when it's too late to avoid them. Understanding how these charges work, and knowing there's an alternative, puts you in a stronger position to protect your finances and make a decision that truly works for you.

Exit Fees in Retirement Villages Explained

Exit fees are one of the least understood costs in traditional retirement villages, and they can significantly reduce the money you walk away with when you leave. Sometimes called departure fees or deferred management fees (DMFs), these charges are calculated as a percentage of the ingoing contribution or entry payment you made when you moved in. Depending on the operator and the contract, exit fees can range from 25% to as high as 50% of your home's value.

The fee typically accrues over time. For each year you live in the village, the percentage increases until it reaches a cap. So, if you move in and your circumstances change after several years, you could lose a substantial portion of the money you originally put in. That's money that could have gone toward your next move, aged care costs, or simply enjoying your retirement.

Beyond exit fees, traditional retirement villages often come with other costs that aren't always front of mind at the point of signing. Shared capital gains arrangements, council rates, strata fees, and ongoing management charges can all eat into your finances over the long term. When these are stacked together, the true cost of living in a retirement village can look very different from what was quoted at the start.

The Fee Structures that Reduce Your Refund

Deferred management fees are the most common form of exit fee in Australian retirement villages. Rather than being charged upfront, they're deducted when you leave. The fee is calculated as a percentage of the amount you originally paid to move in, and it grows for each year of residence until it hits a cap set out in your contract.

A typical structure works like this: you might pay 3% per year, capping at 30% after ten years. Some operators charge higher annual rates of 4% to 5%, with caps reaching 35% to 50%. If you paid $400,000 as your ingoing contribution and the DMF sits at 30%, the operator deducts $120,000, and you receive $280,000. That's a substantial reduction, particularly if you need those funds for aged care or to support your family.

As outlined by Consumer Affairs Victoria, the departure fee is typically the largest single deduction from a resident's refund. For contracts entered into on or after 1 May 2026 in Victoria, the departure fee must be calculated on a daily basis, stops accruing the day you hand back vacant possession, and must be based on the amount you originally paid to move in rather than the resale price.

Deferred management fees aren't the only charge to watch for. Some retirement villages also take a share of any capital gains made on the unit when it's sold. This fee is calculated as a percentage of the increase in value between what you paid and what the home eventually sells for.

You could be required to share up to 37.5% of the capital gain with the operator. In New South Wales, this figure can reach 50%. So, if you bought in at $350,000 and the home sells for $500,000, the $150,000 capital gain could see you handing over $56,250 or more, on top of any DMF already deducted.

When you combine a 30% deferred management fee with a significant capital gains share on a $500,000 sale, the total deductions can exceed $200,000. That leaves you with a fraction of what you expected, and potentially less than what you originally paid. For contracts signed on or after 1 May 2026 in Victoria, if the contract shares capital losses with the resident, it cannot give the resident a larger share of any loss than the share of gain the resident would receive, according to Consumer Affairs Victoria.

One detail many residents don't anticipate is that ongoing fees and charges can continue after you've moved out, for as long as the unit remains unsold. These cover maintenance, repairs, insurance, and management costs for the village.

The rules vary by state. In Queensland, you're responsible for all ongoing charges for the first 90 days after vacating. For the next six months, costs are split between you and the operator. In Victoria, residents are liable for maintenance charges until the earliest of: another resident entering into a contract for the premises, another resident taking up residence with the operator's consent, or six months after vacant possession is handed back. For Victorian contracts signed on or after 1 May 2026, once you hand back vacant possession, the operator cannot charge any further maintenance charges. In New South Wales, legislative changes in 2021 limited liability for recurring charges to 42 days on unsold retirement village units.

The average monthly recurring charges in Australian retirement villages sit around $518, according to the Property Council of Australia's 2020 Retirement Census. If your unit takes months to sell, those ongoing fees add thousands of dollars to the total cost of leaving.

Even after you've left, getting your money back isn't immediate. According to Consumer Affairs Victoria, the refund for contracts signed on or after 1 May 2026, the maximum wait is 12 months after you permanently vacate, unless the contract or an agreement specifies an earlier date.

That waiting period can create real financial stress for people who need funds to pay for aged care or alternative accommodation. Residents in this situation may be able to request advance payments from the operator directly to a new care provider, but this requires negotiation and isn't guaranteed.

The Hometown Australia Land Lease Model

Hometown Australia's land lease living model removes exit fees from the equation entirely. There's no deferred management fee, no departure charge, and no percentage skimmed from your home's value when you choose to move on. You own your home outright, and when it's time to sell, you keep 100% of any capital gains.

The structure is straightforward. You purchase your home and lease the land it sits on within a Hometown community. The ongoing cost is a site fee, which covers the lease of your land, maintenance of community amenities, and professional on-site management. On-site managers look after operations within each community and maintain shared facilities, so there are no body corporate fees to worry about. For eligible pensioners, the site fee can be partially offset through government rental assistance subsidies, including payments through Centrelink or Veteran's Affairs.

There's no stamp duty on the purchase either, and no other government charges of that kind. This is a meaningful saving at the point of entry that traditional property transactions don't offer. And because you own the home itself, you have genuine control over your asset, your living situation, and your financial future.

Keeping Every Dollar You've Earned

The difference between keeping everything and losing a quarter or more of your home's value is not a small detail. It's the kind of figure that changes what retirement looks like.

Consider a home purchased for $400,000 in a traditional retirement village with a 30% exit fee. When you leave, you'd hand back $120,000. Add a capital gains fee on top, and the total deduction climbs even higher. In a Hometown community, that money stays with you. If the home has appreciated in value, the gain is yours too. No split with the operator, no contractual clawback.

This financial transparency is one of the reasons land lease living appeals to people who've worked hard to build their wealth and don't want to see it eroded by fine-print fees. It means more flexibility if you want to travel, support family, or transition to a different form of care later in life.

Communities Across Four States

Hometown Australia operates over 65 communities across four states, giving you genuine choice about where and how you live.

In New South Wales, communities stretch from Sydney and the Central Coast through to the Mid-North Coast, Port Stephens, and the South Coast. Whether you're drawn to a coastal lifestyle or prefer something closer to the city, there are options at a range of price points, including both brand-new and pre-loved homes.

Across Queensland, you'll find communities in Brisbane, the Gold Coast, the Sunshine Coast, Toowoomba, and the Fraser Coast. For people looking for warmer weather and a relaxed pace, Queensland's Hometown communities offer exactly that, paired with resort-style facilities and an active social calendar.

In South Australia, the Fleurieu Peninsula is home to communities set among rolling wine country and coastal scenery. It's an increasingly popular choice for people chasing a sea change without the price tag of metro living.

Hometown has also expanded into Victoria with Lumora, Merrifield, a boutique over 55s community in North Melbourne's fastest-growing new city. Lumora offers lighter city living, a sophisticated option for those who want the energy of city living paired with the ease of low-maintenance, contemporary homes.

Every Hometown community operates under the same model: no exit fees, no stamp duty, no body corporate fees, and full ownership of your home.

Ongoing Fees and Costs at Hometown

Transparency around costs matters, especially when you're making one of the biggest financial decisions of your life. The primary ongoing cost in a Hometown community is your site fee. This covers the lease of your land, maintenance of shared spaces, access to community amenities such as pools, gyms, bowling greens, and clubhouses, as well as professional on-site management.

Beyond the site fee, you're responsible for your own electricity and water usage, WiFi or NBN connection, general household running costs, and home insurance if you choose to have it. There are no council rates to pay, no body corporate fees, and no hidden charges waiting at the end of your stay. The site fee is a known, regular cost, which makes budgeting simpler and more predictable.

For eligible residents receiving the Age Pension, the Australian Government's Commonwealth Rent Assistance can help offset a portion of the site fee. Payments through Centrelink or Veteran's Affairs may also apply, though individual circumstances and eligibility differ, so it's worth making your own enquiry directly. You can read more about the financial benefits of land lease living to see how the numbers work.

Exit fees aren't just a cost you pay at the end. They affect the decisions you make throughout your time in a retirement village. Some residents feel locked in because leaving would mean forfeiting tens of thousands of dollars. Others delay a move to aged care because the financial hit is too steep. The fee creates a pressure that sits in the background of an arrangement that's supposed to bring peace of mind.

With Hometown's no exit fee model, that pressure doesn't exist. You're free to sell your home when you choose, keep the proceeds, and move on without a financial penalty. That kind of freedom is worth more than any amenity list or glossy brochure.

Most traditional retirement villages do charge exit fees, often ranging from 25% to 50% of your ingoing contribution. It's one of the biggest costs to watch for, and it's essential to check the contract structure before committing. Land lease communities offer a different model. Because you own your home and lease the land, there's typically no departure charge or deferred management fee. Hometown Australia operates on this model across the majority of our communities, though fee structures can vary between individual locations, so it's always worth confirming the details for the specific community you're considering

Common costs that catch people off guard include exit fees (often 25% to 50%), shared capital gains arrangements, council rates, maintenance fund contributions, and ongoing management fees that can increase over time. In a Hometown community, there are no exit fees, no stamp duty, no council rates, no body corporate fees, and no shared capital gains. You are responsible for your own utilities, WiFi/NBN, and home insurance if you choose to have it.

Aged care fees are determined by a means test conducted by Services Australia, which assesses your income and assets. While you can't avoid these fees entirely if you're assessed as able to contribute, financial planning before entering aged care can help. Speaking with a financial adviser who specialises in aged care is strongly recommended.

Centrelink's treatment of your living arrangement depends on whether you're classified as a homeowner or a non-homeowner. In a traditional retirement village, residents are generally classified as homeowners, which means they're typically not eligible for Commonwealth Rent Assistance. In a Hometown land lease community, residents are often classified as non-homeowners for Centrelink purposes, which can result in a higher assets test threshold and potential eligibility for Commonwealth Rent Assistance and other payments through Centrelink or Veteran's Affairs. Individual circumstances vary, so contact Services Australia for a personalised assessment

Exit fees are usually calculated as a percentage of the ingoing contribution, accruing annually. A common structure is 3% per year, capped at 30%, though some operators charge higher rates with caps reaching 50%. For Victorian contracts signed on or after 1 May 2026, the fee must be calculated on a daily basis and based on the amount originally paid, not the resale price. Hometown Australia does not charge any exit or deferred management fees.

Exit fees in Victorian retirement villages are governed by the Retirement Villages Act 1986 (Vic) and are disclosed in the residence contract. Fees commonly range from 20% to 50% depending on the operator and the length of stay. Under reforms which took effect from 1 May 2026, departure fees must be calculated daily and stop accruing when you hand back vacant possession. Hometown Australia's Victorian community, Lumora at Merrifield, operates under the land lease model with no exit fees, no stamp duty, and no deferred management fees.

In Queensland, stamp duty may apply when purchasing into a traditional retirement village, depending on the contract type. In a land lease community like Hometown Australia, there is no stamp duty or other government charges payable on the purchase of your home.

Fees in NSW retirement villages vary widely but typically include an ongoing contribution, ongoing fees, and exit fees governed by the Retirement Villages Act 1999 (NSW). Exit fees can be significant. Hometown's land lease communities in NSW charge a site fee with no exit fees, no body corporate fees, and no stamp duty.