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How much does it cost to live in a retirement village?

If you’re thinking about making the move into a retirement community, there are several costs to understand and consider.

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06 October 2022

Stories | Retirement Living

How much does it cost to live in a retirement village?

Key points:

  • Like any property market, retirement village costs can vary depending on location, age of the unit, and communal facilities
  • The costs associated with moving into a retirement village can be broken down into three main stages: Before you move in, whilst you are living in the property, and what happens when you leave
  • The bulk of what you pay is called an entry payment, which is returned to you when you leave - minus a deduction called a Deferred Management Fee (DMF)
  • Not-for-profit organisations like BaptistCare usually offer residents a Loan License Agreement, giving you a ‘licence’ to occupy the property for as long as you like. There is no stamp duty associated with this type of ownership agreement

Whether you are downsizing to a home that is easier to manage or you are simply attracted to the community spirit of a retirement village, you are certainly in good company. The 2021 Retirement Living Census by PWC and the Property Council of Australia showed that retirement villages are swiftly growing in popularity amongst older Australians, with increased affordability and a booming development pipeline.

Once you’ve toured a few villages, it’s easy to understand their attraction. Many offer relaxed, community living with resort-style facilities on your doorstep. Residents often have easy access to swimming pools, walking tracks, salons, bowling greens and more, all whilst being able to connect with like-minded people at a similar stage of life.

The costs associated with this popular lifestyle choice can be more complex than a sale within the wider property market, but here we explain how it works in three easy steps:

  1. Before you move in, you pay a deposit and then a lump sum called an entry payment
  2. Whilst living in the retirement village, you will pay recurrent, fortnightly fees to cover upkeep of the village
  3. When you leave, your entry payment is returned to you, minus a departure fee, also known as a Deferred Management Fee (DMF).

1. Before you move in

Pay your deposit

Once you’ve found your dream home, the retirement village operator will ask you to pay a deposit to take the property off the market. The deposit is a fixed amount but will vary depending on the village you are considering. It might range from $1,000 to $5,000.

If you decide to pull out of the sale before you move in, your operator is legally required to refund your deposit in full.

Pay the entry payment

Your entry payment is the lump sum you pay when you move into the retirement village and buys you the right to live in your home.

The entry payment can also be referred to as:

  • Ingoing Contribution
  • Entry Fee
  • Purchase Price

How much is the entry payment?

Just like the broader housing market, the value of retirement village units can vary greatly depending on which location you choose, the age of the property, and what kind of facilities are available in the village.

Most of the time, buying into a retirement village is more affordable than the local housing market. The 2021 Retirement Living Census found that retirement village homes were significantly less than the median house price in the same postcode. Even as the market steadies in the wake of the pandemic, prospective residents might expect their retirement village unit to be valued at around 80 percent or less of a similar property in the local housing market, dependent on their choice of operator.

There are often flexible entry payment options too. You might choose to pay less initially and have a higher departure fee when you leave (we go into further detail about this in step 3).

As always, it is important to consider your own personal circumstances when making financial decisions and consult with a financial advisor for tailored advice.

Review and sign the ownership agreement

If you buy into a retirement village in NSW or the ACT, the three most common types of ownership (or tenure) that your operator might offer are:

  • Lease Hold – You pay the property’s market value in exchange for a period of time (for example, a 99-year lease). This is most commonly used by ‘for-profit’ operators.
  • Strata or Community Title – Under this model you pay the agreed purchase price, are registered on the title deed, and become a member of the owners’ corporation. This is an uncommon form of ownership in retirement villages.
  • Loan License Agreement – Your lump sum (entry) payment buys you a licence to occupy your home indefinitely. This is commonly used by not-for-profit providers.

At BaptistCare, we offer our customers a Loan Licence Agreement. This means that your ingoing payment will buy you the ‘licence’ to live in your home for as long as you like.

There are several benefits associated with a Loan Licence Agreement, such as:

  • No stamp duty
  • No capital replacement – this means that you will not have to replace or repair any items provided by the operator when you leave
  • No refurbishment costs when you leave
  • Guaranteed fixed return with no capital loss or gain (this means the value of your home will stay the same during the time you live there)

2. Whilst you live in the village - pay recurrent charges

Whilst you are enjoying village life, there will be recurrent, fortnightly charges to pay for the general upkeep of the village, a little bit like strata levies. This means you can enjoy retirement living with peace of mind, knowing that any unexpected maintenance costs are covered - and dealt with - by your provider.

These charges go towards:

  • Water access, water usage and rubbish collection
  • Building insurance
  • Cleaning, maintenance, and repair of common areas
  • Access to all village facilities, which may include things like a swimming pool or a village bus
  • Village staff

What is not covered in the recurrent fees?

You will be required to pay for your:

  • Telephone
  • Internet
  • Electricity
  • Home contents insurance
  • Pay TV

How much are recurrent fees?

Recurrent fees can vary depending on the retirement village and the type of communal facilities on offer. You can learn about current BaptistCare rates across our villages by completing the enquiry form at the bottom of this page.

3. When you leave the retirement village - pay a Deferred Management Fee (DMF)

The Deferred Management Fee (DMF) is also known as:

  • Departure Fee
  • Exit Fee

What is a Deferred Management Fee (DMF)?

The Deferred Management Fee (DMF) covers the ongoing improvement and sometimes the expansion of village facilities to ensure residents can enjoy them long into the future.

Incorporating the bulk of these more considerable maintenance costs into the Deferred Management Fee (DMF) means that village operators like BaptistCare can keep residents’ fortnightly fees lower as well as offering more flexibility around entry payment options.

When you leave the retirement village permanently, your initial entry payment will be returned to you minus the Deferred Management Fee (DMF).

How much is the Deferred Management Fee (DMF)?

At BaptistCare villages, this is commonly around 30 percent of what you initially paid if you live in the village for six years or more. Before that, it is calculated at a rate of five percent per year.

The exact amount of the DMF can be customized based on your individual circumstances, and it is always recommended that you consult with a financial planner to work out which options will suit you best.


  • You can choose to pay a lower entry payment and have a higher percentage of it deducted when you leave the village.


  • You can choose to pay a higher entry payment and have less deducted – or even a full refund – when you leave.

For some, the flexible options around Entry Payments and Deferred Management Fees make retirement living significantly more affordable – opening the door to a lifestyle they hadn’t previously thought possible.

Case Study: Chris and Judi*

Chris and Judi bought into a retirement village in 2014.

They have lived happily in their two-bedroom, two-bathroom unit for eight years, and have now decided to leave the retirement village and move in with family.

  • Entry Fee: $500,000
  • Deferred Management Fee (DMF) at 30%: $150,000
  • Funds returned to Chris and Judi upon departure: $350,000

*Fictional case study indicative of flexible entry payment and DMF options

Case Study: Donna**

Donna bought into a retirement village in 2018.

After three years, she decided to leave her three-bedroom unit and move into an aged care home.

  • Entry Fee: $750,000
  • Deferred Management Fee (DMF) at 15% (5% for each year): $112,500
  • Funds returned to Donna upon departure: $637,500

**Fictional case study indicative of flexible entry payment and DMF options

What if I decide that retirement village life is not for me?

Most village residents gain much fulfillment from being part of a retirement living community. But as with any significant life change, there is always an adjustment period. If you are downsizing, for example, or are new to village life, it can take a few weeks to get settled and feel truly at home.

If you decide, however, that you would like to leave the retirement village, BaptistCare villages offer a 90-day money-back guarantee, along with a full refund of any recurrent charges you paid. You will only be charged market rent for the time that you stayed in the property.

How do I find a retirement village near me?

If you’d like to know more, contact us via the enquiry form below, and one of our friendly staff will be in touch to answer any questions you may have, otherwise, you can find your closest retirement village.

BaptistCare has been trusted by thousands of Australians across the retirement living, aged care and community service sectors since 1944. While we are not-for-profit, there are a few things that we certainly are for: outstanding quality and a quest to truly make a difference, not just in our retirement living communities, but in all communities.

Click the link below to learn more about BaptistCare's

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