Featured | Ingenia

It’s apples and oranges when comparing retirement villages to land lease communities

By Rachel Lane, author and seniors finance expert.

Downsizing can be an exciting time, but it pays to do your research and crunch the numbers. Rachel Lane compares the different financial arrangements and why it’s like comparing apples and oranges between retirement villages and land lease communities.  

There are so many different terms used by operators, from the more traditional “retirement village” or “over 55s community” to the more contemporary “gated community”, “lifestyle resort” and even “aged care”. While it may seem that there are too many different financial arrangements to compare, the reality is that most retirement communities are either a Retirement Village or a Land Lease Community, and the differences are important.

I find it easiest to break down the numbers into the Ingoing, the Ongoing and the Outgoing.

 Retirement villages operate under the Retirement Villages Act and you have a lease or ‘licence to occupy’. The ingoing is the price you pay for your right to occupy your home and use the common facilities.

Oranges: In a land lease community the price you pay upfront is to buy your own home and have a leasehold over the land. There are often no stamp duty fees to pay on the purchase of a new home in either model.


In both a retirement village and a land lease community residents need to pay a weekly or monthly fee to cover the running of the community, its facilities and the rates.

Apples: In a retirement village this maintenance fee is often called a “general service charge” or “recurrent charge”. In a retirement village, pensioners need to pay an amount below a certain threshold (currently $203,000) to be eligible for rent assistance.

Oranges: In a land lease community it is called site fees. Because of the unique ownership structure of land lease communities, most pensioners qualify for rent assistance on their site fees. It is not uncommon for the site fees in a land lease community to be higher than the general service charge of a retirement village.

The greatest confusion between retirement villages and land lease communities comes from the exit fees, also called deferred management fees (DMF). Generally, when selling your home in either a retirement village or land lease community you’re likely to incur some costs – typically agent’s fees and marketing expenses, it may also include the cost of repairs or improvements to your home to prepare it for sale.

Apples: In a retirement village exit fees are standard. The exit fee is likely to be a percentage of either you purchase price or re-sale price, anything between 25% and 40% is common. The exit fee may also include a sharing of capital gain with the operator.

Oranges: Where you are likely to find the biggest difference between the two is that most land lease communities don’t charge exit fees. You own your own home, and it is a willable asset, so the home owner keeps 100% of any capital gains made on the property if or when they decide to sell their home.


Let’s have a look at how a house in an Ingenia community compares with a similar home in a retirement village when you exit after 10 years. In this case study the Ingenia Lifestyle resident receives $589,643 on exit, where as a retirement village resident receives only $377, 262 after the exit fees.

Ingenia Lifestyle Retirement Village
$450,000 $450,000
Site Fees $180p.w General Service Charge $130p.w
*Rent Assistance $62p.w** Rent Assistance $0

Assumed Capital Growth @3%p.a

Value in 10 years time



Value in 10 years time


Assumed Selling costs @ 2.5%


What you get back:

$589,643 (no exit fees) $377,262 (after exit fees)

*For people who are eligible to receive an Australian Income Support Payment.

**Figure based on a couple