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What is a Retirement Village?

on the Thursday, March 24, 2016

A retirement village is a complex of residential units or a number of small residential dwellings on common land. The units can either be owned by private company or owned and run by non-profit organisations.

A retirement village often gets confused with aged care homes (formerly known as nursing homes or hostels. An aged care home provides nursing care and support in a home that requires an assessment to gain entry.

A retirement village provides housing for people over the age of 55 who are still able to live independently – they do not need regular nursing care. In some retirement villages, personal care and support can be provided for an additional fee.

Retirement villages are located throughout Australia in the ACT, New South Wales, Northern Territory, Queensland, South Australia, Tasmania, Victoria and Western Australia

When you live in a retirement village, it is not like owning your own home. As a resident, you provide the retirement village with an interest free loan. This gives you the right to live in a retirement living unit and make use of the different lifestyle options your choice of retirement village offers.

When you leave the retirement village, you are entitled to a return on any premium that has been paid – based on the arrangements made in the original agreement or contract. This could be current market value or the amount paid at the time you entered the unit, minus any fees in the agreed contract.

Retirement villages offer a range of housing types. See below for some examples:

Resident-Funded Units

Resident-funded units are generally sold at current market value. As a resident, you do not own the unit but rather you have purchased a loan licence agreement which gives you permission to live in the village. When you move out of the unit, the village administration will keep a percentage of the sale price.

When you live in a resident-funded unit, you are still required to pay a weekly maintenance fee which covers the services offered by the retirement unit. You will also need to pay for general household expenses including telephone, internet, electricity and contents insurance.

Entry Contribution Units

Entry contribution units are sometimes offered by not-for-profit organisations. They request an entry contribution upon moving into their retirement village. In exchange, you have the right to occupy the unit.

Some organisations may refund a small amount or all of the contribution when you move out of the village. Arrangements like this are negotiated between the residents and the organisations. You will also be required to pay a weekly maintenance fee.

Flexi Units

Flexi units are generally one-bedroom dwellings where residents have the option of living independently or making use of the care services the retirement village offers on a user-pays basis.

Serviced Apartments

Serviced apartments are typically one-bedroom units where the resident pays a weekly service fee in addition to the licence to occupy. This service fee usually covers extra services such as assistance with showering, cleaning and laundry.

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