In Downsizing your home on Monday 6th Apr, 2020

The 5 big financial wins you can make at a land lease community

Apr 06, 2020
Aussie retirees are taking advantage of land lease communities to boost their retirement funds.

If you’ve made the decision to downsize, you’ve probably already started to consider which type of home will help you have the best possible retirement experience.

You may have even explored the obvious property options, such as a smaller house, a new apartment or even the idea of moving in with your kids. But one idea that may not have come up yet is a land lease community – and it’s one well worth considering because it has the potential to leave you with more money to spend on having fun!

Land lease communities, which are sometimes called lifestyle or over-55s communities, are an increasingly popular choice for older Australians who want to retire to a resort-style environment, while freeing up equity in their home and lowering their living costs so they can enjoy life after work.

Ingenia Lifestyle is the biggest and most established Aussie land lease community provider, with communities in Queensland, New South Wales and Victoria that are already home to more than 3,500 residents who’ve discovered the lifestyle and financial benefits of living in a thriving community where your money stretches further.

You can visit an Ingenia Lifestyle community any time that suits you by booking a personal tour, but if you’re keen to understand first how a land lease community could boost your budget, read on, because we’ve written an easy guide.

Keep more of your home equity

Downsizing’s biggest drawcard for many people is that it frees up what’s often a large amount of equity that’s locked in their large, family home – equity that can be used to increase their retirement income or make a longed-for purchase that’ll add to their retirement, such as a caravan or boat.

But that equity only becomes available if your downsized home is considerably cheaper than your family home, and that’s where land lease communities are winners because standalone, newly built two-bedroom houses can be purchased for as little as $229,000.

Enjoy Rent Assistance and no rates

Council rates are rising at astronomical rates in Australia. But the way land lease communities are structured means that residents don’t have to pay council rates because when you buy into such a community, you’re purchasing the house but leasing the land.

There’s a second benefit, which is that if you’re an Age Pension recipient, you could also be eligible for Rent Assistance from Centrelink, which you can use to offset the weekly site fee residents pay the community provider for amenities such as pools, gyms, lawn bowl greens and more.

Avoid thousands of dollars in stamp duty

The prospect of paying thousands of dollars in stamp duty on the purchase of a new home is one of the factors that put some older Aussies off downsizing, but buying into a land lease community doesn’t attract stamp duty.

You don’t even need to put down a large deposit to secure your home, nor pay any kind of rental bond before you move in. The only upfront cost is the purchase price of your home, which you then own outright.

Cut your utilities and maintenance costs

Maintaining a four-bedroom house with a big backyard and even a pool, isn’t cheap. But you can wave some of those costs goodbye when you move into a land lease community. Most properties have a generously sized two or three-bedroom layout, so you should notice a steady decline in your electricity bills once you’re no longer having to power a big house.

Meanwhile, garden maintenance and the upkeep of community facilities and amenities (such as footpaths, roads and parks) is included in your weekly site fee that you may be able to offset with your Rent Assistance payment from Centrelink.

Even better, living in a land lease community means the extra time you would’ve once spent dusting unused bedrooms or mowing the yard can be spent enjoying those facilities. You won’t even miss the extra outdoor space when you’ve got pools, bowls greens and clubhouses to use – and an on-site maintenance team to take care of everything.

No exit fee to worry about

While most retirement villages charge residents an exit fee, also known as a deferred management fee or DMF, that can equal as much as 50 percent of their property’s purchase price should they wish to sell their home and leave the community, land lease communities don’t charge an exit fee.

That means you keep 100 percent of any capital gain you may make on the sale of your home. And given that land-lease communities are the fastest-growing housing solution for Aussies aged 55-plus, it’s a good bet you won’t have to wait long for your property to sell!

Your road map to downsizing starts here!

Australia is experiencing a wave of over 50s considering their future but are stuck making the right decision. If you’re unsure of what’s next, don’t worry we have crunched the numbers for you.

Learn More

Would having no rates and lower utilities bills be a big help to you? Have you visited a land lease community yet?

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