In short
- A retirement village is a community of homes for older people, run by an operator, with shared facilities.
- The rules come from each state and territory, so they differ with the village’s address.
- What you get back when you leave depends on your contract, so read the contract before you look at the clubhouse.
- The move can change how the Age Pension assets test sees you.
If you have toured a retirement village and liked what you saw, the next step is not the deposit. It is the contract, read slowly, with the questions below beside you.
What a retirement village is
A retirement village is a group of homes for older people, run by an operator. Residents share things like gardens, a community hall, a pool or a bus, and the operator looks after the grounds.
It is not aged care. You live independently in your own unit or villa, and you come and go as you please.
The retirement village Act in your state
Retirement villages are governed by state and territory Acts, and the rules differ by state. In Queensland it is the Retirement Villages Act 1999, which defines the exit fee and requires operators to pay former residents their exit entitlement within 18 months.
So the first question for any village is simple: which state’s Act applies, and what does it say about leaving?
What you are buying
In Queensland, the law calls what you get a right to reside, under a residence contract. Depending on the village, you may hold it as a freehold interest, a lease or a licence. Your contract says which.
So two villages with the same price can work very differently when you move on.
Money in, money while you live there, money out
There are three moments to look at, and each one is in the contract.
| When | What happens | What to look for |
|---|---|---|
| Moving in | You pay to take up the home | The amount, and what it buys you |
| Living there | You pay regular charges for the village’s running costs | What they cover, and how they can rise |
| Leaving | An exit fee is taken and the rest is paid to you | How the fee is worked out, and when you are paid |
In words: when you move in, you pay to take up the home, so look at the amount and what it buys you. While you live there, you pay regular charges for the running of the village, so look at what they cover and how they can rise. When you leave, an exit fee is taken and the rest is paid to you, so look at how the fee is worked out and when the money reaches you.
Getting your money back
Leaving is the part to read most carefully. The home may need to be re-let or resold before you are paid, and you may need the money for your next move, such as into care.
In Queensland, the law requires the operator to pay your exit entitlement within 18 months. Other states and territories have their own rules.
The Age Pension: homeowner or not
The Age Pension assets test treats homeowners and non-homeowners differently. Non-homeowners can hold more in assets before the pension starts to fall.
| Assets free area, from 1 July 2026 | Homeowner | Non-homeowner |
|---|---|---|
| Single | $333,000 | $600,000 |
| Couple (combined) | $499,000 | $766,000 |
In words: from 1 July 2026, a single homeowner can hold $333,000 in assets before the assets test applies, and a single non-homeowner $600,000. A couple who own their home can hold $499,000 combined, and a couple who do not, $766,000.
Above those amounts, every $1,000 in assets over the assets free area reduces a pensioner’s asset tested pension rate by $3 per fortnight.
So the question for a village is which side of that line you land on. That depends on what you paid to move in.
Services Australia compares what you paid to move in, called your entry contribution, with the extra allowable amount: the gap between the homeowner and non-homeowner assets limits for a single person at the time you moved in. If you paid more than that, you are treated as a homeowner, and the entry contribution is not counted as an asset. If you paid that much or less, you are treated as a non-homeowner, and it is counted.
If you sell the family home to move in, the money you do not spend on the village becomes an asset in the test, and it may earn income. Run through that before you sign, not after.
Where an investment property fits
Some people sell an investment property to fund the move, and some keep it for the rent. Either way, the tax on a sale is its own question, and our article on selling an investment property in retirement walks through it.
Questions to take to the contract
- Which state’s Act covers this village?
- What exactly am I paying for when I move in?
- What are the regular charges, and how can they rise?
- How is the exit fee worked out, and on what amount?
- When will I, or my family, be paid after I leave?
- What happens if I need to move into care?
Take your contract and these questions to a lawyer who knows village contracts before you sign. It is one of the few documents where an hour of reading can change what your family receives.
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Education only, not personal or financial advice.