The Secrets

It needs to be noted that there is significant variation in deferred management fees/ exit fees charged by retirement village operators. However, it is not unusual for fees to be between 2% and 3.5% calculated per annum for the first 10 or 15 years. The total percentage payable on exit is generally calculated having regard to the period of ownership multiplied by the annual percentage as a proportion of either the original purchase price or subsequent selling price. This could mean that if you bought into a retirement village, you could be required to hand over somewhere up to 50% of the value of your home when you sell it. These fees are generally not payable when you own a home in a residential land lease community. As advised above, some retirement village operators also require you to pay a proportion of any capital gain in the property ie: the difference between the original purchase price and the sale price of your property. This is often calculated at between 25% and 50% of the capital gain, but can be as much as 100%. So, if the charge was 50% and your home had increased in value by $100,000, you would be required to pay $50,000 to the operator. Residential land lease communities do not generally require exit fees or capital gain sharing fees. It is arguable that a strata title apartment or townhouse does not have a recurrent charge once you have bought in, but there are many which charge a high weekly strata management levy or sinking fund charge. These can be equivalent to a recurrent fee in a retirement village or residential land lease community. In addition, these types of properties will see you liable to pay council rates with no ability to obtain rent assistance from the government.

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