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.
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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 the 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.
Lifestyle communities are priced very differently from 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.
Moving to a lifestyle community is a significant financial and personal commitment and one that requires careful planning and consideration before jumping in.
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.
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.
As with any contract, there are steps you need to take as part of the exit process from a lifestyle community.
Do I have to pay stamp duty if I buy in a lifestyle community?
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?
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.
Do I have to be retired to live in a lifestyle community?
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.
Am I entitled to Government Rent Assistance
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.
How many people can live in my home in a lifestyle community?
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.
Do I get to keep the capital gains if I sell my home in a lifestyle community?
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.
Can my friends and family use the facilities at my lifestyle community?
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 the 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.
Can I have a pet in a lifestyle community?
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.
Can I bequeath my lifestyle community house in my will?
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.
Will I have to pay exit fees if I sell my lifestyle community house?
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.