Many people put a great deal of time and consideration into their new retirement home, but very few give consideration as to what happens when they should decide to leave.
The reasons for leaving are many – perhaps the location wasn’t quite right, you’d like to move closer to family, or you need to move to somewhere that offers a higher level of medical care. Unfortunately, in more cases than not, exit fees in retirement villages are what tend to catch residents off guard.
In this article, we look at:
- What happens when you decide to leave a retirement village
- Some of the hidden fees you might not have been expecting
- Retirement options without some of these fees
What Happens if I Decide to Leave a Retirement Village?
Moving house is a stressful time – especially if it is accompanied by ill health or other family considerations.
Under those circumstances, thinking about the financial implications of your move might be the last thing on your mind.
Unfortunately, many people are dismayed when they learn that the sale of their retirement home is subject to deferred management fees, assorted exit fees and capital gains sharing.
That means the money you were counting on to fund the next stage of your life is much less than you might be expecting which only adds stress to an already challenging situation.
This is why it’s so important to understand all the retirement living options available to you. Especially when it comes to your lifestyle needs now and into the future, before you sell your family home.
Let’s look a little deeper.
You Will Incur an Exit Fee
Exit fees are charged to residents of retirement villages when they leave the village. These fees cover the cost of
The amount of the exit fee can vary depending on the specific retirement village and the terms of the resident’s contract. Typically, the fee is calculated as:
- A percentage of the initial purchase price
- The current market value of the resident’s unit, or
- Capped at a certain percentage (between 20 to 40 percent) or a specified dollar amount
For example, a resident who has sold their home for $500,000 could face fees up to $200,000 – and that doesn’t include agent fees.
It is important that you understand the implications of these fees and charges and consider alternatives that may not charge these fees at all.
You Will Have to Share Your Capital Gains
Did you know that you and your family may not enjoy the full value of capital gains should you decide to sell your home?
Some retirement villages may charge a fee based on any capital gains you have made on the sale of the home. This means you are obligated to share a percentage of your capital gains with the retirement village.
In some villages that may be up to 37.5 percent.
Under certain circumstances these fees might be negotiable on a case-by-case basis.
You May Incur a Refurbishment Fee
Retirement village refurbishment fees are charges that may be included in the exit fees that residents of retirement villages
This fee is charged by the village operator to repair and repaint a property before it is offered for sale.
The amount of the refurbishment fee can vary depending on the specific retirement village and the terms of the resident’s contract.
Typically, the fee is calculated based on the condition of the unit and the extent of the refurbishment required. It may be calculated as a fixed dollar amount or as a percentage of the cost of the refurbishment.
In some cases, retirement village operators may allow residents to perform their own refurbishments and renovations before leaving to reduce the refurbishment fee charged. However, this will depend on the specific retirement village and the terms of the resident’s contract.
What Happens if You Leave a Land Lease Community Lifestyle Village?
Did you know there is an alternative to the traditional retirement village residential model?
Land lease community lifestyle villages provide an appealing housing model that is becoming increasingly popular with active over 50s Australians. They are ideal for those who are looking to downsize and still wish to capitalise on their financial asset: their home.
Communities like Living Gems have a simple, affordable contract structure – you purchase your home and pay a modest weekly site rental for the land. That’s it.
There are No Exit Fees
At Living Gems, there are no exit fees, including deferred management fees. Once you purchase a home, the only other charge is a modest weekly site rental fee which covers the cost of on-site management, maintenance of the grounds and the upkeep of the resort facilities.
You Get to Keep Your Capital Gains
Deferred management fees? Capital gains fees? Refurbishment fees? At Living Gems, we don’t believe in them!
Your home is your asset, and you shouldn’t have to share capital gains with a resort operator. We believe one of the biggest benefits to you is the ability to maximise on the capital growth which you may need for the next stage of your life.
Better Value-for-Money Homes
Homes at Living Gems are also surprisingly affordable because we are a land lease community. Why pay for the land when you don’t need to?
Enjoy top-notch resort facilities and a wonderful lifestyle in some of the most sought-after locations in South East Queensland.
Many of our residents enjoy ‘rightsizing’ from a large family home to a thoughtfully designed modern home with quality inclusions that come as standard. The money realised from the sale of the larger home helps your future lifestyle – enjoy more travel and leisure activities!
Reduced Weekly Site Management Fees
The only ongoing charge at Living Gems is a modest weekly site rental. Because we are a land lease community, eligible Australian Seniors and Veterans’ Affairs card holders can receive rental assistance to defray the cost further.
Experience Lifechanging Over-50s Living at Living Gems
If you’re weighing up downsizing options and looking for resort-style living that offers excellent value for money without the hidden fees and charges, then why not take a look at Living Gems over-50s lifestyle resorts?
Located in Australia’s most desired locations in South East Queensland and the Toowoomba region, Living Gems offers a simply lifechanging lifestyle. Why not enquire with our friendly team or request an information pack or book a tour today.