Moving into a retirement village can provide plenty of benefits for those requiring or wanting aged care.
From the sense of community, easy access to care service, and low maintenance accommodation, there are plenty of options available to make retirement living and aged care more comfortable.
What are retirement villages?
Retirement villages are made for the needs and lifestyle of people aged 65 and above who do not need additional aged care assistance, with or without the age pension. The most common form of a retirement home are independent living units.
An independent living unit appears to be designed for their residents’ aged care, as only 17% of retirement village residents mention that they need help to manage their daily needs. It’s lower than the proportion of residents who search for aged care assistance, such as home care.
What are the costs of living in a retirement village?
This lifestyle can come with a range of fees and possibly payment for things you may not have encountered before – even more confusing when there is a change in costs depending on the type of contract.
- Pay Before Moving In
Essentially, you will need to pay a contribution before moving in, with a mandatory period where you can change your mind, and the deposit can be refunded easily. In each state, following the signing of a contract, purchasers are entitled to a refund during a ‘cooling-off’ period.
- Cost of Moving In
When you buy into retirement villages, you will either pay an entry contribution amount (sometimes known as entry fee or entry price) or a purchasing price, depending on whether you pay a former resident for accommodation or the village’s owner.
Leaseholds are generally set up, so entry payment is usually the property’s current market value. These can be a type of unit, and payment is periodic but not daily. If your village uses leasehold contracts, this means the operator owns the accommodation, services, and facilities.
- Ongoing Fees
These will cover facilities, staff’s services, water rates, security, other insurances, contents insurance, and village accommodation insurance. You may also have to pay for additional services such as help with personal care.
- Moving Out Fee
When you leave the village, they will deduct either deferred management fees, a departure fee, or exit fees at the settlement of sale or re-occupancy of your home. The costs form part of the purchase price, but payment is delayed until a different resident decides to move in.
The amount is calculated using a formula that involves a percentage of your successor’s entry costs multiplied by the number of years of your occupancy and may include a proportion of capital appreciation.
As with the case of reselling, while the market’s fee and value will be determined, additional factors in a retirement village can add more to nursing homes, care facilities, or your villa and apartment. Depending on your state, the village is entitled to part of the capital gains you earn. In other places, it’s 50% of your capital gain.
- Extra Fees and Charges
Regardless of whether you move out of the retirement village, you might be charged a few expenses to take care of costs, such as ongoing maintenance fees and stamp duty, until your property is sold or occupied. Luckily, it’s not a daily payment, but can be periodic.
After leaving, ex-residents are liable to fees given a maximum amount of time. Stamp duty, meanwhile, means a tax that is levied on property purchases.
Can you buy a retirement home?
There’s no better moment than the present to arrange your retirement housing. It’s especially true if you take out a mortgage to finance your purchase.
Taking out a mortgage now allows you to lock in a low-interest rate and receive a head start on the service. Buying a retirement home now also gives you plenty of time to save for any changes that you might need to pay. There are significant benefits you would like to receive from an investment standpoint.
Additionally, you can apply for fee assistance from the Australia government and wait for the approval. You may also take an interest-free loan from the government to help pay the fee for your new home or the services provided.
There is a lot to be considered before you search for aged care homes. While it is true that it’s ideal to find one early on, that does not mean you should be reckless in your search. Always find help from professionals and research when you search for an aged care facility. Remember, you may be the one to live in your home, but there is no harm in asking for like opinions to refine your own.
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