Most of us say we want to stay in our own home for as long as possible, and most of us mean it. Then a fall, a diagnosis, a partner’s death or simply too many stairs forces the question earlier than planned, and it often gets decided in a rush.
Retirement villages and ageing in place are both good options. They suit different people, they cost money in very different ways, and the contracts involved are among the most complicated documents most people will ever sign. Here’s what to think about while you still have time to think.
Ageing in place: more possible than it used to be
Staying at home doesn’t have to mean managing alone. Government-funded help at home is arranged through My Aged Care. Since November 2025, ongoing in-home care has been delivered through the Support at Home program, which replaced the old Home Care Packages. An assessment works out what help you’re eligible for, from cleaning and gardening through to nursing, personal care and equipment. Support at Home also includes funding for home modifications such as grab rails and ramps.
The strengths are obvious. You keep your home, your neighbours, your routines and, for pension purposes, an exempt asset. The weaknesses are less obvious until you live with them:
- Wait times. Assessment and funding can take months, and the help you’re approved for may not match what you need on a bad week.
- Contributions. Under Support at Home, many people contribute towards the cost of their services depending on their income and assets.
- Isolation. This is the one people underestimate. A house that suited a family of five can become a very quiet place for one person who no longer drives.
- Maintenance. Gutters, gardens and broken hot water systems don’t stop because you’ve turned 80.
Retirement villages: buying a lifestyle, not a property
The single most important thing to understand about most retirement villages is that you usually aren’t buying real estate the way you bought your house. Many villages use a loan-licence or leasehold arrangement. You pay an “ingoing contribution” that gives you the right to live there, and when you leave, the village pays you back an exit entitlement under the terms of your contract.
That exit entitlement is where the real cost sits. Common features include:
- A deferred management fee (DMF). A percentage of the entry price or resale price that the operator keeps when you leave. It usually builds up year by year to a cap, often somewhere between 25 and 40 per cent.
- Capital gain sharing. Some contracts let you keep any increase in value. Others give the operator part or all of it.
- Refurbishment costs. Who pays to bring the unit up to standard before it’s resold varies from contract to contract.
- Ongoing fees. Weekly or monthly charges for maintenance, management and shared facilities, which can keep running for a period after you leave.
None of this is necessarily bad. A village with a pool, a bus, a library and people your own age just down the path is worth a lot to plenty of people. You just need to know what you’re paying for, and that it’s often paid on the way out rather than on the way in.
Ten questions to ask before you sign anything
- Is this a loan-licence, leasehold, strata or rental arrangement?
- What is the deferred management fee, how fast does it build up and what’s the cap?
- Who keeps any capital gain when my unit is resold?
- What will I pay each month, how have those fees changed over the last five years, and how long do they continue after I leave?
- Who pays for refurbishment when I leave, and who decides what work is done?
- How long will it take to receive my exit entitlement if the unit doesn’t sell? Several states now set a maximum time, so ask what applies here.
- What happens if I need more care? Is there an aged care facility attached, and do residents get any priority?
- Can my partner stay on if I move into care or die?
- Is there a residents’ committee, and can I talk to some current residents without staff present?
- How long is the cooling-off period, and what do I lose if I change my mind?
Don’t skip the independent advice
Retirement villages are regulated by state and territory laws, which differ on cooling-off periods, exit payments and disclosure. Most states also require operators to give you a disclosure statement before you sign. Read it, then have a solicitor who regularly deals with retirement village contracts look at it. The fee is small compared with the amounts involved.
It’s also worth checking how a move would affect your pension. In some cases, if your ingoing contribution is small enough, Centrelink treats you as a non-homeowner, which changes your assets test threshold and can make you eligible for Rent Assistance. Our explainer on the Age Pension assets test and the family home covers why that matters.
So which is better?
Neither, in general. Ageing in place suits people with good health, a manageable home and family or friends nearby. Villages suit people who value company, security and having someone else fix the gutters, and who are comfortable trading some of their eventual estate for that.
The worst choice is the one made in a hospital corridor after a fall. If you’re in your late 60s or 70s and still well, now is the time to visit a few villages, get a My Aged Care assessment if you’re eligible, and have an honest conversation with the people who’d help you either way.
FAQ
Do you own your unit in a retirement village?
Often not in the usual sense. Many villages use loan-licence or leasehold contracts, which give you the right to live there. Your money comes back to you as an exit entitlement when you leave, minus fees.
What is a deferred management fee?
It’s an amount the village operator keeps when you leave, usually a percentage of the entry or resale price. It builds up each year you live there, up to a cap set in your contract.
What help can I get to stay in my own home?
Government-funded in-home support, including cleaning, personal care, nursing and home modifications, is arranged through My Aged Care after an assessment. Ongoing care is delivered through the Support at Home program.
Is there a cooling-off period for retirement village contracts?
Yes, but its length and conditions depend on your state or territory. Ask the operator and your solicitor what applies before you sign.
This article is general information only. Retirement village rules vary by state, so get independent legal and financial advice before signing a contract.
