Retirement Villages Explained

What is a Retirement Village?

A retirement village is a purpose-built community designed for older Australians who are generally aged 55 or over and seeking a lifestyle that offers independence, safety, and a sense of community. It’s not aged care — it’s independent living, often with the option to access more support as your needs change.

Residents live in their own private unit or apartment, while sharing communal facilities like clubhouses, gardens, gyms, and sometimes even swimming pools or cinemas. These communities are ideal for people who are active, social, and looking to downsize their home without compromising their lifestyle.

Why Consider a Retirement Village?

There are many reasons why Australians choose to move into retirement villages. Some are looking to simplify life — no more big lawns to mow or homes to maintain. Others are after a more social, secure, or connected environment.

• Downsizing – Move into a more manageable, modern home that’s designed with older people in mind.
• Security – Villages often have secure entry points and on-site staff to give you peace of mind.
• Social Life – From movie nights to walking groups, there’s always something going on.
• Support on Hand – Many villages offer in-home care services or links to health providers.

Types of Retirement Villages

Not all retirement villages are created equal—and that’s a good thing. With different lifestyles and support needs in mind, retirement villages in Australia come in a variety of styles to suit a wide range of personal preferences and health considerations. Whether you’re after a completely independent lifestyle or you’d like a little help with daily chores, there’s a village out there designed just for you. Let’s take a closer look at the most common types of retirement villages you’re likely to come across.

Independent Living Units (ILUs)

Independent Living Units—often simply called ILUs—are a popular option for retirees who are still active and capable of managing their daily lives without assistance. These are private, self-contained homes usually set within a well-maintained and secure village environment. Most ILUs are either one or two-bedroom residences, designed with older adults in mind. That means step-free access, modern kitchens, accessible bathrooms, and other age-friendly features like emergency call buttons.

While residents live independently, they benefit from the community atmosphere and shared amenities like clubhouses, gardens, walking paths, and social events. The beauty of ILUs is that they strike a perfect balance: you get to enjoy your own space, but you’re never too far from company or support if needed. Many residents choose ILUs because they’re downsizing from the family home but still want to maintain their freedom and privacy.

Serviced Apartments

If you’re still mostly independent but could use a little help with some of life’s daily tasks, serviced apartments might be the ideal solution. These apartments are generally located within the retirement village but offer additional support services such as daily meals, housekeeping, laundry, and sometimes even assistance with personal care.

Serviced apartments are designed for comfort and convenience, often with compact layouts to reduce mobility demands. Meals are usually provided in a communal dining area, and cleaning is handled regularly, giving residents more time to focus on hobbies, health, and socialising. For people who value their autonomy but find certain chores becoming a bit too much, serviced apartments can provide the right level of support—without the need to move into full-time aged care.

Co-located Villages

Some retirement villages are developed alongside or integrated with residential aged care facilities. These are known as co-located villages. They offer a great option for people who want peace of mind for the future. You can move into the independent or assisted living part of the village now, and if your care needs increase down the track, you won’t need to relocate far—or at all. That means you can stay in the same community, surrounded by familiar faces and environments, even as your circumstances change.

For couples with different care needs, co-located villages can be particularly valuable. One partner may require higher-level care, while the other can continue living independently nearby. This setup helps keep loved ones together and reduces the emotional strain often associated with relocating into aged care.

Costs & Contracts – What You Really Need to Know

When it comes to retirement villages, understanding the financial side of things is absolutely crucial. The fee structures can be quite complex, and they often differ significantly between providers. That’s why it’s so important to take your time, ask lots of questions, and read the fine print carefully before signing anything.

Let’s walk through the key financial elements you’ll come across when considering a move into a retirement village, so you can feel informed and confident about your choices.

Entry Cost (Ingoing Contribution)

Most retirement villages require an upfront payment known as the entry cost, also referred to as the ingoing contribution. This payment is typically a substantial lump sum — often comparable to purchasing a home — but it’s important to understand that you’re not actually buying the property in the traditional sense.

Instead of acquiring a freehold title like you would with a regular house, you're usually purchasing either a leasehold or a licence to occupy. That means you have the right to live in the unit and use the village facilities, but you don’t own the bricks and mortar. This arrangement gives you security of tenure without the responsibilities of homeownership, such as council rates or building insurance.

The amount of the entry cost varies depending on the location, size, and quality of the unit or apartment, as well as the reputation and services of the village itself. In major metropolitan areas, entry costs can start from around $300,000 and climb upwards of $1 million for premium developments.

It’s always a good idea to find out:

• What’s included in the entry price
• Whether any of it is refundable
• What happens if you decide to leave earlier than planned

Deferred Management Fees (DMFs)

Now, this is where things can get a little tricky. The Deferred Management Fee (DMF), also known as an exit fee, is one of the most misunderstood aspects of retirement village contracts — and also one of the most significant.

The DMF is a fee that you don’t pay upfront, but rather when you leave the village, whether that’s because you’re moving to aged care, downsizing again, or your estate is finalising your affairs. The fee is deducted from the refund of your original ingoing contribution.

Typically, the DMF is calculated as a percentage of your entry price, and it accrues over time. A common model might look like:

• 3% per year for the first 10 years
• Capped at a maximum of 30%

So, if you paid $500,000 to move in, and stayed for 10 years, your DMF could be $150,000. That means your estate (or you, if you’re still around) would receive $350,000 back when the unit is re-licensed or re-leased to someone new.

Some villages calculate the DMF based on the entry price you paid, while others calculate it on the resale price, which can affect how much you or your estate ultimately receives. This makes it essential to fully understand the terms before committing.

Also keep in mind:

• Some villages may continue to charge fees until your unit is re-occupied
• DMF structures might differ for serviced apartments versus independent living units
• The cap, accrual rate, and calculation method should all be clearly disclosed in the contract

Ongoing Service and Maintenance Fees

Once you're living in the village, you'll be paying regular ongoing fees to cover the running costs of the community. These typically include things like:

• Gardening and landscaping
• Council rates
• Building insurance
• Upkeep of communal areas
• Staff wages
• Village bus and social activities

These fees can range from a few hundred dollars to over $1,000 per month, depending on the village and the services offered. It’s important to note that these are not fixed and may increase over time due to inflation or increased operating costs.

Be sure to ask whether your ongoing fees are:

• Set by the village or capped by legislation in your state or territory
• Subject to regular reviews
• Different for independent units versus serviced apartments

Some providers offer fixed-fee models or capped increases for added peace of mind, which can help with budgeting.

Exit and Refurbishment Costs

In addition to the DMF, some villages may deduct refurbishment costs or renovation fees from your refund when you leave. This is often to bring the unit back to a presentable state for the next resident. These costs can vary widely — from basic touch-ups to full kitchen or bathroom upgrades.

It’s important to clarify:

• Who pays for the refurbishment?
• Is there a standard amount or is it based on actual work done?
• Will you be liable for marketing or sales fees?

Legal Advice and Cooling-off Period

Before signing a retirement village contract, it’s essential to obtain independent legal advice — ideally from a solicitor who specialises in retirement living or elder law. These contracts can be lengthy and complex, and legal professionals can help you understand your rights and responsibilities.

Most states in Australia also require villages to offer a cooling-off period — a set number of days during which you can change your mind after signing the contract, without penalty. Be sure to ask how long the cooling-off period is in your state and what steps you need to take if you decide not to proceed.

Legal Considerations

Each Australian state and territory has its own laws governing retirement villages, so contracts and protections can vary. Always get legal advice before signing a contract.

• Cooling-off periods – You usually have a period to change your mind after signing.
• Disclosure statements – Villages must provide upfront details about fees, services, and rights.
• Resident agreements – These cover everything from responsibilities to rights, maintenance obligations, and exit conditions.

The fine print matters, so it’s worth working with a lawyer who specialises in retirement village law.

What’s Life Really Like in a Retirement Village?

For many, it’s a fresh start — a chance to enjoy life without the worries of property maintenance or isolation. You’ll find friendly neighbours, regular activities, and shared amenities that make daily life more enjoyable.

Think happy hours, tai chi classes, book clubs, arts and crafts, barbecues, and plenty of time to enjoy your garden or the library. It’s about choice — participating in as much or as little as you like.

Questions to Ask Before You Decide

• What are the total costs — now and in the future?
• What’s included in ongoing fees?
• How do I exit the contract, and what will it cost me?
• What support services are available?
• Is the village operated by a for-profit or not-for-profit group?
• Can I bring pets? Are visitors allowed to stay overnight?
• What happens if I need aged care in the future?

Downsizing and Selling the Family Home

Downsizing is often the first step before entering a retirement village. Selling the family home can be emotional, but it also frees up capital and simplifies your lifestyle. It’s important to factor in any Centrelink implications, especially if you’re receiving the Age Pension. Your home’s value and the money from its sale may affect your entitlements.

We always recommend speaking to a financial advisor who understands retirement living before you make the move.

Is a Retirement Village Right for You?

Retirement villages offer community, convenience, and peace of mind. But they’re not for everyone. Some people thrive in the communal setting, while others may prefer to stay in their own home for as long as possible.

The key is to do your homework, visit a few villages, and really think about what you want from this next chapter of life.

Final Thoughts

Retirement villages are evolving. No longer just for the “elderly,” many are vibrant, dynamic communities full of active older Australians making the most of their time. With the right research and planning, a move to a retirement village can offer a refreshing, secure, and enjoyable lifestyle.

At Silver Lifestyle, we’re here to help you navigate these choices with clarity and confidence.

Whether you’re looking now or planning for the future, you’re in the right place.