The cost of living in a retirement village in New Zealand varies depending on factors like location, the type of accommodation, and the range of facilities and services offered. Generally, residents are required to buy a right to occupy lease, then are charged an ongoing weekly fee, and finally are charged a deferred management fee when leaving (which is taken out of the value of your unit).  You also need to be aware of any other additional admin fees.  Weekly fees cover day-to-day operating costs and are generally between $100 and $200 per week, depending on the village’s amenities and services. These fees are typically fixed for the duration of your stay, providing some financial predictability. It’s crucial for potential residents to carefully review the fee structure of each village, considering both current costs and potential future expenses.

For those considering alternatives to retirement villages in New Zealand, several options cater to different needs and preferences. Home care is a popular choice, allowing individuals to receive necessary assistance while staying in their own homes. This option is ideal for those who require some level of care but wish to maintain a high degree of independence. Another alternative is downsizing to a smaller, more manageable home, which can reduce living costs and maintenance responsibilities. Community housing projects and over-65 communities offer a sense of community and shared amenities without the structure or fees of a retirement village. Additionally, co-housing arrangements, where people share a house but have private quarters, are gaining popularity among seniors seeking both companionship and independence. Each option presents its own set of benefits and challenges, and the best choice depends on personal circumstances and preferences.

Yes, it is possible to rent in a retirement village in New Zealand, though the availability of rental options tends to be very limited. Renting can be an attractive choice for those who prefer not to pay the substantial entry fee typically associated with retirement village living. Renters in a retirement village enjoy many of the same benefits as owners, such as access to communal facilities, maintenance services, and, in some cases, care services. The rental agreements in retirement villages often include a fixed term, providing stability for residents. However, it’s important to note that rental costs in retirement villages can be higher than standard market rent, reflecting the additional amenities and services provided. Potential renters should thoroughly investigate the terms and conditions, including the duration of the lease and what services and amenities are included in the rental agreement.

In New Zealand, the deferred management fee (DMF) for retirement villages is typically calculated as a percentage of the original purchase price of the retirement unit or, in some cases, its resale value. This fee accrues over a set period, often capped at a certain number of years, and is payable when the resident leaves the village or upon resale of the unit. The calculation method and the maximum fee percentage can vary significantly between different retirement villages. Generally, the DMF increases annually for the first few years of residency, reaching a maximum percentage that is predetermined in the resident’s contract. This approach incentivises longer stays, as the fee does not increase beyond the capped period, even if the resident continues to live in the village.

When you buy into a retirement village under a licence to occupy, you’re essentially paying upfront to live there. Part of this payment, often 20-30%, is not returned to you when you leave. This part is called the deferred management fee. Think of it as covering the cost for things like upkeep of the village and getting your unit ready for the next resident after you leave.
This fee usually builds up over the first 2-5 years you live in the village. It’s taken out of the original amount you paid (the initial capital sum) when your licence is sold to someone else. The fee grows gradually over time, often at a rate of 4% each year for five years, until it hits the cap set by the village, which is typically 20-30%.
For example, if your initial payment was $800,000 and the deferred fee was 20% over five years, the fee would grow like this:
After 1 year: $32,000 (4% of $800,000)
After 2 years: $64,000 (8% of $800,000)
And so on, until after 5 years, you’ve reached the 20% cap, which would be $160,000.
This means if you leave the village after 5 or more years, $160,000 would be deducted from your initial $800,000 when it’s time to pay you back. The exact details can vary, so it’s important to talk to the village’s sales manager about how this fee works and what it covers. Some places might have additional charges for re-licensing your unit, while others include those costs in the deferred management fee.

If a retirement village in New Zealand were to go bust, the specific impacts on residents would depend on the circumstances of the village’s financial failure and the legal arrangements in place. However, the Retirement Villages Act 2003, along with associated regulations and codes, provides a framework aimed at protecting residents’ rights and interests in various scenarios, including financial difficulties faced by a village operator.
Under the Act, retirement villages are required to comply with standards that include the registration of the village, adherence to a code of practice, and the appointment of a statutory supervisor. The statutory supervisor’s role is to help protect the interests of the residents, which could become particularly crucial if a village faces financial instability. The legal framework ensures that residents have certain rights before moving in, during their stay, and after they leave the village, including understanding their financial obligations and entitlements.
In the event of a village going bust, the protections in place, such as the statutory supervision and the legal obligations of the village operator, are designed to mitigate risks to residents. However, the exact outcomes for residents, such as the potential impact on their financial investment or living arrangements, would likely vary based on specific details such as the terms of their contract, the reasons for the village’s financial failure, and the actions taken by regulatory bodies or other stakeholders in response to the situation.
For residents or their families concerned about the stability of a retirement village or seeking advice on their rights and options, independent legal advice is strongly recommended. Additionally, organisations like Age Concern offer free, independent advice about moving to and living in retirement villages.

Living in a retirement village in New Zealand offers several advantages and disadvantages that are important to consider before making a decision.
Pros:
Security and Peace of Mind: Retirement villages provide a secure environment, often with gated access or on-site security, giving residents peace of mind about their safety.
Community and Social Interaction: Many residents enjoy the vibrant community life, with plenty of opportunities for social interaction and making new friendships.
Maintenance-Free Living: Living in a retirement village means not having to worry about home maintenance, gardening, or other chores, allowing residents more freedom to enjoy their interests.
Access to Care and Support: As needs change, many retirement villages offer the convenience of on-site care and support services, which can be adjusted without having to move away from the community.
Cons:
Cost: Entry into a retirement village requires a substantial upfront payment, often from the sale of a family home. Additionally, there are ongoing weekly fees and exit costs, which can add up over time. It’s also important to note that residents typically do not benefit from any capital gain when their unit is on-sold.
Social Environment: The communal living aspect of retirement villages may not suit everyone. Those who prefer more privacy might find the social nature of village life challenging.
Deferred Management Fees (DMF): A significant financial consideration is the DMF, which is deducted from the sale price of the unit when it is resold. This fee can range between 20-30% of the original purchase price and accrues over time, usually capped at a certain percentage.
Additional Considerations:
No Capital Gain: Residents do not typically receive any capital gain from their unit, and the return on their investment is generally reduced by the DMF.
Age and Usage Restrictions: Retirement villages have age restrictions and may limit how the unit can be used, including restrictions on long-term guests and modifications to the unit.
Deciding to move into a retirement village is a major life decision that should involve careful financial and lifestyle consideration. It’s recommended to seek independent legal and financial advice to fully understand the implications of contracts and fees associated with retirement village living.

To be eligible for certain financial support if you’re 65 or older, the total value of assets for you and your partner (if applicable) must not exceed $273,628 as of Jan 2024. However, if you’re in a partnership where only one is entering long-term residential care, you have two options regarding asset valuation:
Opt to exclude your house and car from the asset calculation. In this scenario, your combined assets must be $149,845 or less. Note that your home is not considered an asset if it remains the primary residence of your partner or a dependent child.
Choose to include the value of your house and car, keeping the total asset limit at $273,628.
This structure provides flexibility based on whether the inclusion of a primary residence and vehicle is financially advantageous for your situation.

For seniors evaluating their living options, retirement villages and residential rest homes present two distinct paths tailored to different levels of independence and care needs. Retirement villages cater primarily to those who can live independently but appreciate having access to facilities like social clubs, fitness centers, and transport services, enhancing their quality of life with convenience and community engagement opportunities. On the other hand, rest homes are geared towards individuals requiring more comprehensive support, offering around-the-clock care, including help with everyday activities and access to medical services. When deciding between these options, it’s crucial to align your choice with your personal care requirements and lifestyle preferences, ensuring that the environment you choose best supports your well-being and allows you to lead a fulfilling life.

Yes depending on your assets. As of Jan 2024 if you have under $273,628 of assets then you will receive government support as a widow or couple. However if only one is going into a rest home then you can exclude your primary residence and car from the total to have a combined assets of $149,845.

You need to be aware of three main fees.
– The occupation right agreement (ORA), which is the entry cost. Always remember that when you sell the unit you will not get any capital gains that the unit received.
– Your weekly fees. Check whether it is fixed, what it covers and what other options you could pay for to get better services.
– Exit fees. When you leave the unit. You need to understand the amount you will get back, and whether you can transfer to another unit (rest home and the cost for that, and what will be the cost when you buy it when needed). Know the deferred management fee you will be charge. Any refurbishment fees or selling fees, and whether you will have to continue to pay the weekly fees until the unit is sold.