Starts at 60 retirement guide

Considering a lifestyle community

Lifestyle Communities are a style of residential housing and integrated services that offer over-55s an affordable, community-centric way of living.  They are based on a land lease property model where you lease the land from the operator, purchase the house that is on the land and pay a service fee for the ongoing maintenance and community facilities on offer.

They are very popular among younger, working, semi-retired and retired peoples who are looking for a community lifestyle and cost-effective housing. Lifestyle communities are structured very differently to retirement communities.  Read on to understand more about how lifestyle communities work and explore how they might work for you.

— A Starts at 60 and Ingenia eGuide

Download our 'Considering a Lifestyle Community Guide' now

A helpful guide packed with information to help you understand and consider moving to a lifestyle community.  It’s free to download. Produced in partnership with Ingenia.

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Considering a lifestyle community

What is a lifestyle community?

Lifestyle communities have surged in popularity in the past decade, with thousands of Australians choosing to put down roots in communities that cater to the needs of active older Aussies. Unlike retirement villages, which often have aged care facilities attached to the premises, lifestyle communities are designed for those in pre or early retirement who want to spend their days playing sports, socialising with other residents and immersing themselves in an active community life. 

Lifestyle communities operate on a land-lease structure, meaning residents own their homes but lease the land from the provider via a weekly fee. This means the village is responsible for maintenance of the land and communal buildings and you only need to worry about the normal maintenance and upkeep of your home. 

The real beauty of lifestyle communities is in the versatility, with providers catering to all budgets, from modest to luxury, ensuring there’s something available for every Aussie.

 

What are the differences between a lifestyle community and a retirement village?

  1. The contracts and fees for retirement villages and lifestyle communities can vary drastically, due to the different obligations and costs of your lease/ownership agreement. A retirement village contract will usually give you the option of a leasehold or freehold/strata title when you’re selecting accommodation; while lifestyle communities allow you to purchase your home and rent the land it’s on. 
  2. Retirement villages typically operate on a deferred management fee (DMF) basis, which means you pay the provider a portion of your capital gains when you sell your house. In contrast, there are some lifestyle communities that do not enforce a DMF and instead charge a small exit fee, or administration fee, of about 4 per cent. When considering a lifestyle community, be sure to ask the provider about its fee structure. 
  3. In terms of facilities and activities, retirement villages tend to have more care facilities than lifestyle communities, but this is changing – with more communities introducing aged care and home care options. In addition, in retirement villages, activities are coordinated by the village manager, whereas residents in a lifestyle community manage activities themselves and choose (with other residents) how the village is run.

 

How much does it cost to buy a house in a lifestyle community?

Lifestyle communities are priced very differently to a retirement village or traditional housing purchase as a buyer usually takes a lease over the land and buys the house that is situated on the land.  They are known by regulators as land lease communities. 

There are communities that cater to a range of budgets. The cost of a home depends on location and whether you’re purchasing a new build or an established home. Depending on the community, a new build could cost you anywhere between $300,000 to $900,000, whereas an established house can range from $260,000 to $800,000.

 

How can I choose the best lifestyle community for my budget and needs?

Moving to a lifestyle community is a significant financial and personal commitment and one that requires careful planning and consideration before jumping in. 

  1. Consider the cost 
    There are lifestyle communities to suit a range of budgets across Australia, from modest and budget-friendly, to those that offer residents luxurious, resort-style living. Your biggest upfront cost will be the purchase of your new home, then you’ll need to budget for your ongoing weekly site fees, water bill (if not covered by the provider) and your regular personal bills, such as health care, phone and internet and groceries. Once you know how much you can afford to pay each week, you’ll be able to narrow down your choices and look at the lifestyle communities that suit your budget.
  2. Consider the amenities
    Lifestyle communities are designed for active over-50s and offer a range of recreational activities and facilities to keep residents entertained and busy. Some of the most common include: clubhouses, restaurants and bars, swimming pools, tennis courts, yoga and pilates classes, walking trails and organised off-site hikes, woodworking tools, book and travel clubs and much more. Many communities also have a lifestyle manager who works with residents to develop activities residents are interested in and plan celebration events throughout the year.
  3. Consider the location
    As with any big move, location is paramount. Some of the key factors to consider when moving to a lifestyle community include its proximity to: public transport, health services such as GPs and hospitals and supermarkets and shopping centres. You may also wish to be close to friends and family or particular schools and parks. You should also consider the things you’ll enjoy doing in your leisure time outside of the community, as this can determine whether you’ll settle close to the city, coast or country.
  4. Consider the management 
    Management can make or break a lifestyle community, so it’s important to look into how it is run prior to signing on the dotted line. Some of the key questions to ask yourself are: is the community financially stable, well maintained and well reviewed? Good management will ensure the grounds are kept clean and tidy, that maintenance is carried out regularly to keep buildings running smoothly, and that residents’ concerns are addressed in a timely and professional manner. 

 

How much do I have to pay in weekly fees and what do they cover?

The weekly fee or land lease is a cost paid to the landlord of a lifestyle community. Your weekly fee covers maintenance costs for common sites such as clubhouses and recreational facilities, as well as green areas, your front verge and security for the community. It also includes council rates and, in some lifestyle communities, your water bill. Weekly fees vary between providers but typically cost anything upwards of $192 for a single self-funded or working retiree and $221 for a self-funded or working couple. If you’re on the Age Pension, you may be eligible for Rent Assistance, which can be used to offset your weekly fee.

 

Can I move to a lifestyle community and keep my Age Pension?

Yes, it is possible to keep your Age Pension when you move into a lifestyle community but it will depend on how you structure your assets and income stream. If you’re selling your family home to purchase a new home in a lifestyle community, it’s likely you’ll be able to keep your pension (you may also be eligible for government Rent Assistance to help pay the cost of leasing the land). However, if you choose to purchase a home in a lifestyle community and rent out your family home, you may not be eligible for the pension if the rent you receive pushes your weekly income above the pension threshold. 


Is it easy to sell a house in a lifestyle community if or when I want to leave?

As with any contract, there are steps you need to take as part of the exit process from a lifestyle community. 

    1. Finding an agent
      You can sell your home through your community’s sales team (you will typically need to pay them a sales commissioning fee, plus an administration fee) or enlist an external real estate agent and negotiate the commissioning fee with them.
    1. Paying exit fees/DMF
      Depending on the rules of your lifestyle community, you may also need to pay an exit/Deferred Management Fee (DMF), which will have been agreed upon when you first bought your home. The DMF typically ranges between 20 and 30 per cent of the sale price. Some communities will waive this fee if you’ve been in your home for less than a year.
    1. Legal advice
      Enlist a solicitor to prepare the contract of sale and help manage the settlement of the house. They can also look over any lifestyle community exit contracts on your behalf. If you have a mortgage on your property, you’ll have to arrange for it to be finalised before settlement. This involves giving your lender a completed discharge of mortgage form.

Frequently asked questions on Lifestyle Communities

Do I have to pay stamp duty if I buy in a lifestyle community?

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No. One of the key benefits to buying a home in a lifestyle community is that you don’t need to pay stamp duty. This tax is covered by the community provider as they are the land holder.

Do I have to pay council rates in a lifestyle community?

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<span style="font-weight: 400;">It depends on the provider whether you have to pay council rates when you live in a lifestyle community. Some lifestyle communities cover the cost of council rates for you, whereas others leave it up to the homeowner. You should ask the provider their rules on this before signing a contract. </span>

Do I have to be retired to live in a lifestyle community?

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<span style="font-weight: 400;">No! You do not need to be retired to live in a lifestyle community. Lifestyle communities are designed for people aged 50 and over, and many members work full-time or part-time. They are often called 'over-50s' or 'over-55s' communities. </span>

Am I entitled to Government Rent Assistance

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If you receive Centrelink support, the Age Pension or Veterans Affairs Benefits you may be entitled to rent assistance. We suggest you check with the relevant government department for eligibility. Or simply visit: <a href="https://www.humanservices.gov.au/individuals/services/centrelink/rent-assistance">https://www.humanservices.gov.au/individuals/services/centrelink/rent-assistance</a>

How many people can live in my home in a lifestyle community?

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<span style="font-weight: 400;">Most lifestyle communities limit the number of permanent occupants to two. However, you may have visitors for up to 30 days at a time. You’ll need to seek approval from community management for guests to stay longer than 30 days. </span>

Do I get to keep the capital gains if I sell my home in a lifestyle community?

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<span style="font-weight: 400;">You will get to keep a portion of the sale price of your home in accordance with the specific rules of your lifestyle community. Some providers charge a commissioning fee of about 2 to 4 per cent if you choose to sell your home through their sales team. Most communities will charge you an administration fee of 1 to 4 per cent to cover paperwork costs. </span>

Can my friends and family use the facilities at my lifestyle community?

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<span style="font-weight: 400;">Some providers give your guests free reign of the facilities, while others limit the use of common areas and recreational amenities to a certain number of hours per visit, so that permanent residents aren’t inconvenienced. Certain communities also allow you to book function halls for private events, so you can celebrate your milestones in style in the company of your loved ones. </span>

Can I have a pet in a lifestyle community?

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<span style="font-weight: 400;">Many lifestyle communities allow pets. Some communities have pet-grooming services on-site, while others have dedicated areas for dogs to run off-leash and socialise with other dogs. </span>

Can I bequeath my lifestyle community house in my will?

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<span style="font-weight: 400;">Yes! Your home can form part of your estate plan and assets in your will. Whoever you leave your home to will have to continue to pay the weekly site fees, or they can sell the home and receive the capital gains.</span>

Will I have to pay exit fees/ deferred management fees (DMF) if I sell my lifestyle community house?

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<span style="font-weight: 400;">Exit fees are also known as Deferred Management Fees (DMF). They vary between communities. One of the biggest drawcards of many lifestyle communities is that they don’t have an exit fee, so you get to keep a larger portion of the sale price on your home. Others have an exit fee that’s capped between 20 and 30 per cent, depending on how long you’ve been living in your home. You should ensure you are aware of a community’s exit fee/DMF before purchasing your home. </span>

Starts at 60 eGuide proudly produced in partnership with Ingenia

Download our 'Considering a Lifestyle Community Guide' now

A helpful guide packed with information to help you understand and consider moving to a lifestyle community. It’s free to download.

— Our trusted partner

Ingenia Communities

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