Home sweet home
Balancing the books on downsizing
The family home is typically the most valuable asset you own, and there are a few factors to consider before downsizing. If you are newly retired, or over 50 and still working, you might be looking at either a retirement village or an over-50s lifestyle resort for your ‘rightsizing’ move.
According to finance expert Rachel Lane author of Downsizing Made Simple with Noel Whittaker, understanding the difference between a retirement village and over-50s resort is vital.
“There are currently five types of retirement village contracts – leasehold, license, company or unit trust title, strata title and rental – while land lease communities have only two separate components, which include the contract for your home and contract for your land,” she says.
Cheryl Chalk, who lives at Amber by Living Gems agrees. Now retired, the former accountant made the decision to move into a Living Gems resort after careful consideration.
“I was familiar with the land lease community model because my parents-in-law lived in one,” she said.
“So, when it came time to consider my own move, I knew the type of resort I was looking for.
“One of the things which was important to me was knowing that all of the capital gains in my home were mine. I didn’t think that sharing capital gains with a retirement village was particularly fair since it is my home.”
To better understand the difference between a land lease community model like Living Gems and a typical retirement village, we’ve created a handy table for a quick reference.
Living Gems vs Retirement Village
Cheryl recommends looking at your financial position and ensuring that you have a healthy cash reserve when you sell your present home.
“Of course, when you move into a land lease resort like Living Gems, there is the weekly site fee to keep in mind. Make sure you have enough cash in reserve for that as well as your utilities and lifestyle,” she said.
“Other considerations are that there is no stamp duty payable on the purchase of resort homes and that people on a government pension may be eligible for some rent assistance to help cover the weekly site rental.”
In the end, each person needs to be satisfied that the decision is right for them, she advised.
“For me, there were other factors that tipped my decision in favour of Living Gems, and they were not financial in nature,” said Cheryl.
“Those factors included living in a location that was relatively close to family and being near to shops and services, as well having a great range of facilities and a welcoming community.”
