Retirement Village Fees

Let’s Talk Money – Retirement Villages and Your Budget

Thinking about moving into a retirement village? You’re not alone. Many older Australians are drawn to the convenience, community, and lifestyle that retirement villages offer. But before you pack your boxes and start dreaming about your next chapter, it's important to take a close look at one thing: the fees.

Retirement village costs can be a little confusing at first glance. There are upfront fees, ongoing payments, exit fees, and special arrangements that don’t always work like standard property purchases. But don’t worry — we’re here to break it all down in plain English, so you can make informed choices that suit your lifestyle and your wallet.

What Are Retirement Village Fees?

Retirement village fees are the costs associated with entering, living in, and leaving a retirement village. These can vary significantly depending on the village, your contract type, your location, and the level of services provided. In general, you can expect three main types of costs:

• Entry costs – sometimes called an ingoing contribution or purchase price.
• Ongoing costs – regular payments to cover services and village operations.
• Exit fees – also known as Deferred Management Fees (DMFs), paid when you leave.

Each of these comes with its own terms, timelines, and potential surprises — so let’s explore each one in more detail.

Entry Costs – What You Pay to Move In

Unlike buying a home in the traditional property market, moving into a retirement village usually means paying a lump sum upfront for the right to occupy a unit or apartment — not for full ownership.

What is an “Ingoing Contribution”?

This is the amount you pay to enter the village, and it gives you a leasehold or license to live in the unit — not the land title. It might look and feel like buying, but it’s more like paying a premium to live in a well-managed community with amenities and support.

How Much Does It Cost?

Entry fees vary widely. In metropolitan areas, they often range from $300,000 to $900,000, depending on location, size, and features of the unit. Regional villages might be more affordable.

It’s worth noting that this cost often includes access to shared facilities (like a community hall, pool, or gardens), plus the peace of mind of an age-friendly environment.

Ongoing Fees – What You Pay While Living There

Just like you’d pay council rates or strata fees in a standard apartment, retirement villages charge residents regular fees to cover day-to-day services and upkeep.

What’s Included?

Ongoing fees may cover:

• Maintenance of common areas (gardens, paths, lighting)
• Use of communal facilities (clubhouse, pool, library)
• Security services
• Village management staff
• Emergency call systems
• Some administrative costs

How Much Will I Pay?

Fees are usually between $350 to $700 per month. These can increase annually, often in line with CPI (Consumer Price Index) or as outlined in your contract.

Be sure to ask what’s included and whether you’ll have to pay for extra services, like meals, home care, or personal support. Each village is different.

Exit Fees – Understanding the Deferred Management Fee (DMF)

Exit fees are the most misunderstood part of retirement village pricing. Often called a “deferred management fee,” this is the cost you pay when you leave — either because you’ve chosen to move, or due to health or end-of-life reasons.

How Do Exit Fees Work?

The DMF is usually calculated as a percentage of your entry contribution and accrues over time. It’s commonly capped at around 30% to 35% of your original payment, spread over 5 to 10 years.

Here’s an example:

You pay $500,000 to enter a village. Your contract states a 30% DMF capped over 6 years (5% per year). If you stay 6 years or more, you’ll pay $150,000 in exit fees when you leave.

Why Does the Village Charge This?

The DMF is how villages fund their long-term operations — it's part of the business model. While it can seem like a hefty charge, remember that it subsidises lower ongoing fees and provides access to community amenities.

Other Possible Fees You Might Discover

• Renovation or refurbishment costs: Some contracts require you to pay part or all of the cost to refurbish your unit when you leave.
• Selling or re-letting fees: Some villages charge marketing or admin fees to resell your unit.
• Capital gains/losses: Depending on your contract, you might share capital gains with the operator — or bear the loss if prices fall.

These can catch people off guard, so always ask for a complete fee schedule before signing anything.

Understanding the Different Contract Types

The kind of contract you sign will determine how fees are structured. Common models include:

• Loan-licence agreements: You pay an ingoing fee, have the right to live in the unit, and pay a DMF when you leave.
• Leasehold agreements: You lease the unit long-term and may still pay a DMF.
• Strata or freehold title: You own the unit and pay body corporate fees, but villages may still include exit charges.

It’s essential to get independent legal advice before signing any agreement. Ask the village operator for a copy of the disclosure statement and contract ahead of time.

Fee Transparency & Your Rights

In Australia, each state and territory has its own retirement village legislation that requires clear disclosure of all fees and charges. You have the right to:

• Receive a full list of all fees — entry, ongoing, and exit
• Take time to review the contract and get advice
• Access a standard disclosure statement and comparison documents
• Use a 14-day “cooling-off” period after signing

Don’t be afraid to ask questions. Villages that are upfront and helpful about their fees are usually better managed and more resident-focused.

Questions to Ask Before Signing

• What is the full cost of entering, living in, and leaving the village?
• How is the Deferred Management Fee calculated?
• Who pays for refurbishments and reselling when I leave?
• Are there annual fee increases? How are they calculated?
• What services are included, and which cost extra?
• What happens if I need higher care later on?

Keep a written list of answers and compare them between villages. It's all about finding the right fit for your lifestyle and your financial peace of mind.

Getting Legal and Financial Advice

Retirement village contracts can be complex. Before signing anything, speak with a legal person who has experience in retirement living law. They’ll help you understand:

• What you’re really paying for
• What happens if circumstances change
• How fees will affect your estate planning or aged care decisions

Also consider consulting a financial adviser who understands the impact of village fees on your pension entitlements and future care needs.

Plan, Compare, and Choose with Confidence

Retirement villages offer a vibrant, supportive lifestyle for older Australians — but they’re not a one-size-fits-all solution. The key to a successful move is understanding the full financial picture.

From entry costs to exit fees, contracts to ongoing payments, it’s all about knowing what you're signing up for — and making sure it aligns with your personal and financial goals.

Here at Silver Lifestyle, we believe that clarity leads to confidence. Use this guide as a starting point, take your time, and seek the advice you need. And remember, you’re not alone — we’re here to support you every step of the way.