Deciding where to live in retirement is a big financial and emotional decision. That’s why it’s important to compare what each retirement village has to offer to determine if it will meet your needs in retirement and if you can reasonably afford to live there.
Ensuring you have all the facts from incoming contributions, ongoing fees and rates, and exit fees, is critical before you decide on where to live. Unfortunately, understanding what will be expected of you financially to move into a retirement community isn’t always so straightforward.
At Mount Gilead Estate we try to be as transparent as possible. But retirement village fees differ depending on the style of property and from village to village. So, comparing villages can be tough, which can make the entire process appear daunting.
That’s why we have put together this guide to retirement village costs to help you understand the costs for living in a retirement community like ours.
There are several main ownership models in Australia for independent living units in retirement villages. The majority of independent living units in Australia, like Mount Gilead Estate, are a ‘loan lease’ or ‘loan licence’ ownership model. Others include rent or strata schemes.
With the loan lease ownership model, the most significant cost of moving into a retirement village is the price of the property to live in, often paid by way of an “incoming contribution”. Ongoing costs for living in the retirement village are shared amongst the residents and paid as “recurring fees”. (See Mount Gilead Estate Fees here) These recurring fees may cover items like electricity for common areas, maintenance costs for common areas, council rates etc. Lastly, there is the fee you pay when you vacate the village or the “exit fee”.
More on these and what they mean are outlined below.
Under a lease/loan style contract, the resident pays an “ingoing contribution”, also called an “entry payment” or “entry contribution”. It is essentially what gives you the exclusive right to reside in your independent living unit.
The fee is paid as an interest-free loan to the village operators. It is then repaid to you, or your estate when you leave the village less what is called a “departure fee”.
The benefit of living in a retirement village is that the ingoing contribution paid for moving into your home is nearly always significantly lower than that of buying comparable real estate in the same area as a given village. The 2021 PwC / Property Council Retirement Census found that the average sale price for one- and two-bedroom independent living units were 55% of the median house price in the same postcode. This means that, despite the huge house price growth across all markets, independent living units remain more affordable in comparison to normal residential living options.
A “departure fee” may also be referred to as an “exit fee” or a “deferred management fee”. A departure fee is paid to the village operators when, as the name suggests, a resident permanently vacates the village.
Departure fees are used to enable lower upfront payments for residents to move into the village. They cover costs that are incurred by the village operators to build and expand the village and its services and facilities that would otherwise have to be covered by the resident or built into recurrent fees. By keeping the entry fee lower, this makes village living more financially accessible to more retirees, therefore, improving their quality of living in retirement. It also frees cash for residents when the move in to give them more flexibility in general to live the kind of life they desire (through a lower than otherwise ingoing contribution).
The amount you pay as an exit fee when leaving a retirement village depends on your contract. Typically, the amount paid is calculated as a percentage of the ingoing contribution or of the price for which the independent living unit is resold, and is paid on a sliding scale based on how long you have resided in the village. For example, if a resident exited a village after having only lived there for 1 to 3 years, the fee they pay might be anywhere from 10% to 30% or higher of the ingoing contribution or of the resale value of the independent living unit, depending on the contract. Generally, this amount is capped but the percentage it is capped at varies by village, so it is important to check your contract.
Some villages offer what is called a deferred fee. This provides residents the flexibility to pay less for their ingoing contribution when they enter the village. However, if you pay less than 100% of the ingoing contribution, you will likely pay a higher percentage for your exit contribution. That is because the management fee has been deferred from the incoming contribution to the exit contribution.
Ongoing contributions are weekly, fortnightly or monthly fees or rates that residents pay to the village operators for the day-to-day shared expenses of the village. What is covered by ongoing contributions varies between villages, however, some of the common things that are covered include;
Operators are not legally allowed to make a profit from these fees. The fees paid are calculated on actual costs. As such, they are likely to increase with inflation or when there are price rises from providers like, for example, the recent electricity price increases.
There are some things that aren’t covered by fortnightly fees though. Again, these vary from village to village but they typically include things like;
Mount Gilead Estate offers some of the lowest fees for a lifestyle this size.
At Mount Gilead Estate, we offer a variety of living options to suit a variety of budgets from single, double- and three-bedroom units to two-bedroom and three-bedroom villas.
One thing that is consistent across all our properties is that the fees are some of the lowest for the size, available amenities, and value-added features available at Mount Gilead Estate. What’s more, our ongoing contributions have not increased more than 7% in the last 5 years, vs. an average CPI increase of 14.5% in the same period. That is as low as a $6 per week increase in 5 years, depending on the home.
Mount Gilead Estate has been able to keep fees low because we continue to grow, making the village one of the most affordable luxury retirement villages in Sydney.
Mount Gilead Estate is more than a retirement village, it is a place to thrive. From the wide-open green paddocks to the neighbouring national park, Mount Gilead Estate is a sprawling retirement village with a rural, country feel just 55km out from the city of Sydney. Offering spacious living, luxurious finishes, and state-of-the-art facilities, combined with some of the lowest ongoing fees, the life you dreamed of for retirement has never been more achievable.
Designed with the vision to provide retirees with affordable living options that can support them as their needs change, there is something here for every over 55. Choose to live in one of the varieties of spacious 2- and 3-bedroom villas or 1-, 2- and 3-bedroom apartments with a balcony or courtyard.
It is the vibrant community and active lifestyle that will draw you in. With facilities like the recently upgraded golf course, three-story clubhouse, two swimming pools, gym, lawn bowls green, and more, as well as the extensive list of daily activities you can be involved in, you’ll wish you moved here sooner.
Register your interest for a personal tour. Meet the residents and experience the vibrant community while seeing everything that the village has to offer. Complete the form on our website to express interest or give us a call on 1300-686-122
We’re excited to meet you!
Visit Mount Gilead Estate to see what your retirement could look like. Tour the village to see our resort-style retirement facilities.
Complete the form with your details and preferred tour times or any questions you have and a member of our sales team will be in touch.
