Finance & Contracts

Understanding the financial and contractual side of living
in a retirement village.

Everything you need to know

Retirement living is unique, both in terms of the financial and contractual structure that’s involved and the lifestyle you enjoy once you’ve moved in.

We believe transparency and clarity is key to making a well-informed decision that’s right for your circumstances. Below, we lay out our financial model and contract options – plainly and clearly.

 

Please consult the VCD for your preferred Reside community for more specific details. Reside Communities recommends seeking independent legal and financial advice before entering into a retirement village contract.

Costs in a Reside
community

It’s important to understand the main financial costs involved with securing, living in and leaving a Reside community.

street view of estate

Entry payment

This is payable when you enter the village and gives you the right to reside in your home for the duration of a long-term lease. This amount will vary depending on the community and home you choose.

Community contribution fee

Applicable under one of our contract options, the community contribution fee is an upfront payment that represents a contribution to the infrastructure, buildings and facilities within the village, similar to the exit fee. Paying it upfront secures a lower exit fee when you leave.

Other entry costs

You may also pay some other costs upon entry, such as costs for the preparation of the contracts, a fee for registration of your lease on the title to the village land and a survey fee (if applicable), for a survey plan of your home to be prepared for registration with your lease.

Your solicitor will also charge for advising you on the terms of the contract and acting for you on the conveyance, just as when you purchase a house.

You will NOT pay stamp duty to live in a home in a leasehold retirement village owned and operated by Reside Communities.

Village fees

While living in the village, all residents pay ongoing, regulated fees to cover the costs involved with running the village, including access to facilities, services like maintenance and gardening, village staff and council and water rates and insurance.

Exit fee

Like the majority of retirement village operators, Reside Communities retains an exit fee when you sell your home in the village. A significant portion of this is continually reinvested into the village. The amount you’ll pay will vary depending on your contract, the amount you paid for your home and how long you have been in the village.

Renovation costs

When you leave, the operator may undertake renovations works to assist with achieving a faster sale and better sale price for your home. Under all of our contract options, any renovation costs are shared equally between the resident and the operator, along with any capital gain from the sale.

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Our contract options

We offer two unique contract models across new and established homes in all Reside communities, so that our residents can choose the option that best suits their individual circumstances.

men playing bowls

Option A

This option reflects a traditional retirement village model, where you pay an exit fee when you leave.

Option B

An ideal option for those who would prefer to pay more upfront and less when they leave. You’d pay 5% of your entry payment – upfront.

What is the exit fee?

The maximum exit fee you will pay is 25% of your entry payment.

How does the exit fee accrue?

The exit fee accrues over five years.

Year 1 = 5%
Year 2 = 10%
Year 3 = 15%
Year 4 = 20%
Year 5 = 25%

After five years in the village, your exit fee will be capped at 25%.

In our experience, the majority of residents stay in the village for well over 10 years. Because our residents share in capital gain, the longer they stay in the village, the more likely they are to earn back their exit fee in capital growth.

Will I pay a community contribution fee?

No – under this contract, you will not pay a community contribution fee.

Will I share in capital gain?

Yes – you and Reside Communities will each receive 50% of any capital gain from the resale of your home in the village.

Will I share in the renovation costs?

Yes – you and Reside Communities will each be responsible for 50% of any renovation costs, in line with your equal share of capital gain.

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What is the exit fee?

The maximum exit fee you will pay is 15% of your entry payment.

How does the exit fee accrue?

The exit fee accrues over three years.

Year 1 = 5%
Year 2 = 10%
Year 3 = 15%

After three years in the village, your exit fee will be capped at 15%.

In our experience, the majority of residents stay in the village for well over 10 years. Because our residents share in capital gain, the longer they stay in the village, the more likely they are to earn back their exit fee in capital growth.

Will I pay a community contribution fee?

Yes – the community contribution fee under this contract is 5% of your entry payment.

The community contribution fee supports ongoing investment in the village while you live there. By paying this fee upfront, you’ll pay a lower exit fee when you leave.

Will I share in capital gain?

Yes – you and Reside Communities will each receive 50% of any capital gain from the resale of your home in the village.

Will I share in the renovation costs?

Yes – you and Reside Communities will each be responsible for 50% of any renovation costs, in line with your equal share of capital gain.

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