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How much can a retirement village cost?

Last Updated at August 20th 2020
There are several charges and fees associated with living in a retirement village, and all payments made before, during and after living in a retirement village must be specified in the entry agreement contract.

Key points:

  • Always check the different retirement village legislation in your State or Territory

  • Stamp duty applies depending on what type of tenure you have on a unit or house in a retirement village

  • There are quite a few fees associated with exiting a village, so make sure you understand all the costs involved before moving into a retirement village

Older couple sitting together making decisions.
There are a number of costs to consider when moving into a retirement village (Source: Shutterstock)

The cost of entering and living in a retirement village do vary, depending on the type of property, the facilities and services offered.

It is important you seek legal advice and have the full details of all applicable charges, what they cover and what you need to pay on exiting before you sign any contracts.

Here are some costs you will need to consider:


Generally, you will need to pay a deposit before moving in. Check with the village how long it can be held for you. Should you change your mind within this specified time, the deposit will be refunded.

If you enter into a binding arrangement with the village, the deposit will be part of the purchase price or entry payment.

In some states and territories, following the signing of a residency contract purchasers are entitled to a refund during a ‘cooling off’ period. Check with the village operator if this cooling off period applies.

You will also need to check whether the village requires an administration fee for refunds.

Entry payment/ purchasing price – What are they?

When you buy into a retirement village, depending on the type of tenure you have, you will either pay an entry payment (sometimes known as an entry fee or entry price) or a purchasing price.

Leaseholds and licence tenures are generally set up so the entry payment is usually the current market value of the property.

Under strata, community and company titles, you generally pay a 'purchase price' for the legal title to your property.

Stamp duty (or land transfer duty)

You will normally have to pay stamp duty, also known as land transfer duty, if your tenure is strata, community or company title.

You will also have to pay stamp duty on leasehold titles if the lease is 'assignable' - this is when you can sell the balance of the term of the lease to a new resident when you leave the village.

For other leasehold arrangements, no stamp duty is payable on leasehold in New South Wales, Queensland and South Australia.

Generally you do not have to pay stamp duty on licence agreements wherever you live in Australia.

Extra fees and charges

Almost all retirement villages have monthly charges to cover the running costs of the entire village.

These will cover for instance, upkeep of facilities, staff, water rates from common areas, security, insurances including workers compensation and public liability, contents insurance for common areas as well as village building insurance.

You may also have to pay for additional services such as laundry or help with personal care.

Centrelink considers that your entry contribution includes all amounts you must pay when you move into a retirement village. It does not include ongoing fees and charges for services and facilities.

The amount of entry contribution you pay depends on whether Centrelink considers you to be a ‘homeowner’ and if you will still be eligible to receive rent assistance.

This figure is called the ‘Extra Allowable Amount’ and is the difference between the non-homeowner and homeowner assets test thresholds at the time the entry contribution is paid.

The Extra Allowable Amount is currently $214,500 (as of 1 July, 2020). Whether you are considered a homeowner affects the amount of assets you can own without affecting your pension entitlement.

If you are not considered a homeowner, your entry contribution is included as an asset. It is not classed as a financial investment and income will not be deemed.

Visit the Centrelink website for more information.

What happens upon vacating?

When you leave a retirement village permanently there are some additional costs to consider.


Management either takes the responsibility for, or assists you or your estate in the resale or re-licencing of your property.

Leaseholds and licences tenures will be refunded when you move out of the village, minus any exit or deferred management fees. Refunds are usually reliant on the property being re-occupied, so it may take a while to come through.

Under strata, community and company titles, you will not get any money back until the property is sold.

While the resale value will be determined by the market, there are additional factors in a retirement village that can add value to your villa or apartment. These include sound management, attractiveness and the services and amenities available to enhance lifestyle.

Departure / Exit fee

The village will deduct a ‘deferred’, ‘departure’ or ‘exit’ fee at the time of settlement of sale or re-occupancy of your home. The fee forms part of the purchase price, but its payment is deferred until the end of the occupancy.

It is calculated at the time of entry and applied on exit. The amount is calculated using a formula that generally involves a percentage of your successor’s entry cost multiplied by the number of years of your occupancy, and may include a proportion of capital appreciation.

Other fees

Even if you have left the village, you may be charged some fees to cover costs, such as ongoing maintenance fees, until your property is sold or occupied.

Regulations regarding this vary from each state and territory; generally there is a maximum amount of time that ex-residents are liable for fees after leaving. This ranges from 42 days in NSW and the ACT, up to 9 months in Queensland or up to 18 months in South Australia.

To find out about the legislation in your state or territory, use the links in our Renting and Owning article.

Where to find help

When considering moving into a retirement village, it is advisable to seek legal and financial advice from specialist individuals or organisations.

Many states and territories also have retirement village resident associations. Use the links on our Renting and Owning article to find out more about your state or territory’s association.

What advantages can you see for yourself if you move into a retirement village? Tell us in the comments below.

Related content:

Renting or Owning
Finding the Right Village
Life in a village

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