Getting ready for the best years of your life after the age of 50 is an exciting time, filled with lots of possibilities for fun and adventure.
But like all good things in life, it requires planning. Taking the time to do it right from the outset provides the foundation for a financially secure future that gives you less to worry about and more to enjoy.
The first thing to plan is where you intend to live. There’s a lot of debate around lifestyle villages vs. retirement villages, so we put together this guide to help you figure out what’s best for you when it’s time to make the choice. Let’s dive in.
Over-50s Lifestyle Villages vs. Retirement Villages: What’s The Difference?
You might see these terms used interchangeably but if you dig a little further, you’ll discover there is more than meets the eye.
Understanding the difference between the two might significantly impact on your retirement arrangements and plans to leave a legacy for your family.
Here are the main differences in a nutshell:
- Retirement villages have complex contracts and financial arrangements including stamp duty, maintenance fees, as well as entry and exit fees. In some places, you don’t even own your own home but simply buy the right to live there.
- Over-50s lifestyle resorts operating under land lease community legislation means you own your home and keep 100 percent of any capital gains made. Also, you don’t pay stamp duty or entry and exit fees.
And this is just the beginning of the differences.
While there are many different types of retirements villages to take note of, here, we’ll look specifically at how over 50s lifestyle resorts like GemLife standout from your standard retirement village. Here’s what stands out:
You Don’t Have to Be Retired
As the name suggest, people who live in retirement villages are retired from work. In fact, in some cases, retirement may be a stipulation of entry.
In GemLife over-50s lifestyle resorts, we welcome a mix of homeowners – some have retired, others are working full time or part time.
What they’ve really ‘retired’ from is the commitment to never-ending home and garden maintenance to embrace ‘rightsized’ homes in a secure community of like-minded people.
Our homeowners tend to be much younger too. The average age of a retirement village resident is 81, whereas the average age of a Gemlife resident is 71 years.
Residents at a GemLife resort also tend to be more physically active, with many participating in sporting activities and enjoying an active social life.
Learn more about downsizing for pensioners here.
You Get Access to Premium Amenities, Facilities and Locations
One of the reasons why you might be looking at either a retirement village or an over-50s community is for the resort-style, relaxed lifestyle.
We recommend you look around at the facilities offered as part of your research. Are there plenty of opportunities to enjoy your favourite sport or meet your fitness goals?
Since retirement villages are designed to cater for older people, the facilities may be geared toward those who want a more sedentary lifestyle and do not have the level of fitness and sporting equipment you’d prefer.
Active over-50s won’t compromise on quality – whether it be quality of life or the quality of the facilities.
At GemLife, we listen to our homeowners who tell us exactly what activities they enjoy and the facilities they want such as a fully equipped gym, heated lap pool with spa and sauna, golf simulator, ten-pin bowling alley, tennis and pickleball courts and lawn bowls green.
The facilities should resemble a luxury five-star resort with exclusive country club with high-end fixtures and fittings and facilities including a hairdressing salon, private cinema, boardroom, games room, bar and theatre stage. And there’s plenty of opportunity to try out different activities with the grandkids when they come to stay!
Just as important is location. Is it close to shopping and other amenities? Is it in a desirable location? GemLife resorts are found in some of the most sought-after coastal and country locations in Australia.
Your Contract is Free from Complication
Retirement village contracts in Australia can be quite complex. These contracts typically involve a range of legal, financial and lifestyle considerations, and can be quite different from the standard residential property purchase agreements that most people are familiar with.
Contract types can include leasehold, license, company or unit trust title, strata title and rental agreements in addition to a range of fees and charges, such as entry fees, ongoing maintenance fees, and exit fees.
Over-50s lifestyle resorts like GemLife operate under a different agreement type, called a land lease community model.
This means that you own your home outright and pay a modest site rental agreement which covers the maintenance of the facilities and the on-site management. That’s it.
There’s No Hidden Costs or Fees
One of the biggest points of difference between retirement villages and land lease over-50s lifestyle resorts are the hidden costs and fees you may be up for.
They typically include:
- Entry fees
- Exit fees
- On-going maintenance charges
- Capital gains sharing sometimes referred to as deferred management fees, and
- Special levies
In land lease community over-50s lifestyle resorts like GemLife, there are no hidden fees and charges.
- You own your home and keep all its capital gains
- Because you are leasing the land your home is on, you do not pay stamp duty
- If you are on an eligible Australian pension or are a Veterans’ Affairs cardholder, you may be eligible for rental assistance to reduce the cost of the weekly site rental.
Legislation
Both land lease communities and retirement villages are governed by state government legislation which sets out the requirements for retirement village contracts, including disclosure and cooling-off periods.
Let’s take a closer look:
Retirement Village Legislation
Each state and territory has its own rules and regulations about retirement villages:
- New South Wales: Retirement villages in New South Wales are governed by the Retirement Villages Act 1999 and the Retirement Villages Regulation 2017.
- Victoria: Retirement villages in Victoria are governed by the Retirement Villages Act 1986 and the Retirement Villages Regulations 2017.
- Queensland: Retirement villages in Queensland are governed by the Retirement Villages Act 1999 and the Retirement Villages Regulation 2018.
- South Australia: Retirement villages in South Australia are governed by the Retirement Villages Act 2016 and the Retirement Villages Regulations 2017.
- Western Australia: Retirement villages in Western Australia are governed by the Retirement Villages Act 1992 and the Retirement Villages Regulations 1992.
- Tasmania: Retirement villages in Tasmania are governed by the Retirement Villages Act 2004 and the Retirement Villages Regulations 2014.
- Australian Capital Territory: Retirement villages in the Australian Capital Territory are governed by the Retirement Villages Act 2012 and the Retirement Villages Regulation 2013.
- Northern Territory: Retirement villages in the Northern Territory are governed by the Retirement Villages Act and the Retirement Villages Regulations.
Lifestyle Village Legislation
Here is an overview of the legislation governing land lease communities (LLCs) in each state and territory:
- New South Wales: LLCs in New South Wales are governed by the Residential (Land Lease) Communities Act 2013 and the Residential (Land Lease) Communities Regulation 2014.
- Victoria: LLCs in Victoria are governed by the Residential Tenancies (Long-stay Tenants) Act 2006 and the Residential Tenancies (Caravan Parks and Movable Dwellings Registration and Standards) Regulations 2010.
- Queensland: LLCs in Queensland are governed by the Manufactured Homes (Residential Parks) Act 2003 and the Manufactured Homes (Residential Parks) Regulation 2019.
- South Australia: LLCs in South Australia are governed by the Residential Parks Act 2007 and the Residential Parks Regulations 2010.
- Western Australia: LLCs in Western Australia are governed by the Residential Parks (Long-Stay Tenants) Act 2006 and the Residential Parks (Long-Stay Tenants) Regulations 2007.
- Tasmania: LLCs in Tasmania are governed by the Residential Parks Act 2007 and the Residential Parks Regulations 2014.
- Australian Capital Territory: LLCs in the Australian Capital Territory are governed by the Manufactured Homes (Residential Parks) Act 2003 and the Manufactured Homes (Residential Parks) Regulation 2004.
- Northern Territory: LLCs in the Northern Territory are governed by the Caravan Parks and Other Accommodation Business (Code of Practice) Regulations 1997.
What are the Main Legislative Differences Between the Two?
There are several key points of differences between retirement villages and land lease communities, and we outline these below:
Ownership
In a retirement village, the resident typically purchases or leases a unit or apartment and becomes a member of the village community.
By contrast, in an LLC, the resident typically owns their home, but leases the land on which it sits. The advantage for homeowners is:
- No deferred management exit fees – only a modest weekly site management fee.
- Security of ownership – you own your own home and your right to occupy the site is guaranteed by government legislation.
- All capital gains are yours to keep when you decide to sell.
Contracts
Retirement village contracts are typically more complex and can be longer in duration than LLC agreements. Retirement village contracts can include provisions for ongoing fees, exit fees, capital gain sharing, and other conditions. LLC agreements tend to be shorter and more straightforward, focusing mainly on the terms of the land lease.
A word of caution: Before deciding how and where you choose to downsize, it is important to seek legal and financial advice before signing any contracts.
Regulation
Retirement villages and LLCs are governed by separate legislation in each state and territory of Australia. While some of the provisions of the legislation are similar, there are also significant differences. For example, in some states, retirement villages are required to have a registered operator who must meet certain qualifications and obligations, while LLCs may not have such requirements and operate through a homeowners’ committee.
Dispute Resolution
Dispute resolution processes for retirement villages and LLCs can also differ. In some states, retirement villages are required to have an internal dispute resolution process and may be subject to mediation or arbitration in the event of a dispute. LLCs are subject to different dispute resolution processes, depending on the specific legislation in each state or territory.
Discover a Whole New Life at GemLife
GemLife resorts are in some of the most desirable areas of Australia, carefully chosen for their proximity to local shops, amenities, medical services and transport links.
If you’re exploring your options for retirement living, why not discover a whole new world with GemLife? Our resorts offer luxurious homes and premium facilities at affordable upfront prices, situated in highly sought-after locations across the country.
To learn more about GemLife, our top-notch amenities, and the locations of our resorts, contact us today to enquire or request an information pack.