When it comes to living in an over 55s community, there are fees and charges that you may encounter. These fees and charges may need to be made before, during and after you take up residence. However, your entry agreement contract will specify all of the associated costs that you may incur. Generally land lease communities have fewer fees than other forms of retirement living but it is worthwhile to check just what fees apply to individual communities.
The actual cost of living in an over 55s community or land lease community will vary depending on the services and facilities available, and the type of property you choose. To help you understand what costs you can expect, we have put together a list of the most common types.
A deposit may be required before moving into an over 55s community. Before paying down a deposit you should check how long the property can be held with the retirement village/land lease community. Once you know how long the property can be held for you, you are able to change your mind for a full refund. Generally, the deposit that you pay down goes toward the entry payment or purchase price of your chosen property.
In some territories and states, a cooling off period is given after the residency contract is signed. Of course, this is all dependent on the particular law or Act in each state or territory and should be checked in advance if it is offered. It is also recommended to inquire as to whether the community deducts an administration fee when processing a refund. An Operator must comply to the relevant Act in force in each state or territory.
Purchase Price Or Entry Payments
Depending on whether you will rent or own your property in a retirement community, you will either pay a purchase price or an entry payment. Generally, license and leasehold or land lease tenures are set so that the market value of your chosen retirement community property is the same as your entry payment.
Under company, community, land lease and strata titles, a purchase price is typically paid to obtain the legal title for your chosen property. For the above titles, stamp duty is normally required. Stamp duty will also be paid on assignable leases. An assignable lease is when they term balance can be sold to another residence upon exiting the village.
When it comes to land lease purchases, there is zero stamp duty involved. At Hometown Australia, you fully own your own home while leasing the land that it is built on. This means that you are exempt from stamp duty. Which can result in significant savings and a more streamlined process. There are also no entry payments apart from the purchase price of your home which you will own.
To help with the running costs of a retirement village or land lease community, it is not uncommon for monthly site fees to be charged. Monthly site fees cover security, staff, upkeep of facilities, public liability and workers compensation, village building insurance, and contents insurance and water rates for common areas.
Utility usage charges, such as gas, water, electricity, internet, telephone and TV packages are typically the responsibility of the homeowner. These utilities are the same that you would have in any property. However, when trying to work out the overall costs are moving into a retirement community it is a good idea to factor them into the equation.
With various retirement villages, deciding to sell your property and exit the retirement village can result in additional fees. It is not uncommon for an exit fee, a departure fee or a deferred fee to be deducted at the time of re-occupancy or sale of your property.
The exit fee is typically calculated based on when you entered and exit the community. The number of years that you occupied the property is multiplied by a given percentage of the entry cost paid by your successor. Capital appreciation may also be applied proportionately.
At Hometown Australia, there are no exit fees upon selling your property and leaving the resort-style over 55s community. Understanding the fees and charges associated with exiting an over 55s community are as important as understanding the entry fees. By choosing a land lease community without exit fees, you are able to make further savings should you decide to sell.
Capital Gains Fees
It is also not uncommon to be charged a percentage of the amount of capital gain when you sell your property in a retirement village. Depending on the total sale price, this can equate to a large percentage of the total sales price. When purchasing your home with Hometown Australia, you keep 100% of the capital gain earned when selling your property.
You may also be required to pay a fee when submitting an application to purchase a property in a retirement lifestyle community. This fee covers the cost for conducting police checks, credit checks and other administrative processes. Before submitting an application to purchase a property. It is a good idea to find out if the retirement village / land lease community charges an application processing fee.
As each state has different regulations governing retirement villages, it can be difficult to discover hidden costs wrapped up in legal jargon. To help you avoid experiencing hidden costs; it is recommended to use a lawyer with an understanding of the industry.
Other things to consider are ongoing fees, what they cover, and if they will increase during the contract term. Knowing whether you will be liable for ongoing fees once you have moved out can also give you a clearer picture about your obligations. Finally, knowing whether the village or communtiy is operated by the same company that owns it can add transparency to site fees.
Hometown Australia provides secure land leases by complying with each states government legislation. Each land lease living community is owned and operated by Hometown Australia, meaning that all associated fees and charges are managed by one company. This helps create clear-cut transparency when it comes to your financial obligations.
Making The Right Choice
Purchasing a land lease property in a retirement community should be a positive experience for everyone involved. Don’t be afraid to inquire about the costs associated with purchasing a land lease property. If the operator is unwilling to divulge your expected costs or give you a ballpark figure, then you should continue your search.
At Hometown Australia, we believe that honesty and transparency is the way forward. If you are interested in purchasing a land lease property in one of our resort-style retirement villages, contact us to discuss your requirements. We are here to introduce you to the lifestyle that you deserve and help you enjoy a stress-free experience.