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Decisions about retirement villages are important; they tend to have a long-term personal and financial impact. Buying into a retirement village is different from buying a house, and legal and financial matters are also more complicated. Retirement villages are operated in different ways, and what they offer varies.

Tips for choosing a retirement village

Don’t rush it! You’re more likely to choose the right retirement village if you don't make a quick decision:

  • Think ahead and consider what you might need in the future – will you be able to continue to live there if your health or mobility declines?
  • Imagine the ideal lifestyle in a retirement village, and make a list of the things that are most important.
  • Visit different villages and find out about the lifestyles they offer, including housing options, facilities and services.
  • Talk to the residents – they know better than anyone what life is like in the village they live in.
  • Take time to read the documentation associated with buying into, living in and leaving the village, including the disclosure statement and occupation right agreement.
  • Find out the total costs. How much is payable on entry? What are the ongoing expenses? Will you share in any capital gain when you leave? Will you have to pay for any capital loss? How will these affect your future and the choices you have?
  • Get independent financial advice from a financial planner or accountant with experience in retirement villages.
  • Get independent legal advice from a lawyer with experience in retirement villages. Ask them about the different legal titles and what they mean.
  • Involve family or friends in the decision.

Retirement village costs

There are usually significant costs when entering and leaving a village or transferring within it, as well as ongoing expenses while living there. It’s important to know what the charges cover and exactly how much they will be. These will vary from village to village, so comparing the ‘deals’ will help you find out the potential upside and downsides of different offers.

Your needs may change in the future, so keep this in mind when working out the financial details of moving to a retirement village.

This financial checklist will help – it suggests questions to ask, and might prompt ideas for a few others.

Financial checklist (PDF 1.1 MB)

You'll need to know about the costs involved in leaving a village in case you decide you want to live elsewhere, or you want to leave money in your will. Be aware that you may come out with significantly less money than when you entered the village, particularly if there are deductions from the price you originally paid for the unit and if you do not get any share in the ‘capital gain’.

Legal matters

Buying into a retirement village is different from buying other residential property, so it’s important to make sure you get legal advice and understand the legal and financial implications.

 

Buying into a retirement village is different from buying other residential property. The financial structures and legal titles can vary from village to village, so it's important to talk to a lawyer to understand their implications.

Get independent legal advice before signing up with a retirement village. You are required to do this by the Retirement Villages Act. Find a lawyer with experience in retirement villages, who is independent of the village you're thinking about. If a lawyer doesn't have this experience, ask them for a recommendation or go to the Law Society to find a lawyer who can help.

Legal titles

There are four basic legal titles commonly used for retirement villages:

  • Licence to occupy
  • Unit title
  • Cross lease
  • Lease for life

Some villages combine the features of 'licence to occupy' with 'unit title' to create their own type of title.

The Act requires all legal titles to include a 'memorial' that protects a resident's interest in their unit and helps to ensure the village's continued operation.

Licence to occupy

About three-quarters of New Zealand's retirement villages offer licences to occupy. A licence to occupy gives you the right to live in the unit, but it doesn't mean you own the unit. This usually means that you can't borrow against the value of the unit, though some villages may offer this option.

Unit title

In a village based on a unit title structure, you own your own unit. You also become a member of a body corporate that is responsible for the upkeep and maintenance of communal areas. Often the body corporate has a management agreement with the village manager (who is responsible for looking after the day-to-day operation of the village) to administer and look after the affairs of the body corporate.

Cross lease

If you have a cross lease, you share ownership of the land and its units, and grant leases to one another to live there. The leases include agreement about the length of the lease, the use of the land and the residents' rights to live there.

Lease for life

In this case, you have a lease for a unit or property in the village, which remains in place until you die or leave the village. Some villages also offer rental units.

Retirement Villages Act

The Retirement Villages Act 2003 protects people entering into and living in retirement villages. It introduces a Code of Residents' Rights and Code of Practice as well as dispute resolution.

The Act requires all retirement villages:

  • To be registered
  • To appoint a statutory supervisor
  • To provide intending residents with a disclosure statement, occupation right agreement and other important documents before buying into the village
  • To provide a process for communicating with and involving residents in the village
  • To provide a process for handling complaints and disputes

The Act also requires all intending residents:

  • To get an independent lawyer to explain their occupation right agreement and its implications before signing the agreement

The Ministry of Business, Innovation and Employment is responsible for administering and implementing the Retirement Villages Act. 

The Retirement Villages Register is operated by the Companies Office. Use it to check a village is registered and to search their required registration documents.

Retirement village checklists

Thinking about moving to a retirement village? Print these checklists out and take them along when you visit retirement villages. When asking questions, remember to think about your future needs and how they might change.

Retirement village lifestyle checklist

This lists many different aspects of the retirement village lifestyle, from entry criteria, location and management through to rules, care, services and facilities offered. You’ll need to decide which ones are most important.

Lifestyle checklist (PDF 1.1 MB)

Retirement village financial checklist

This suggests some important questions to ask about entry, transfer, living and leaving costs, as well as questions about the retirement village's financial operations.

Financial checklist (PDF 1.1 MB)

Retirement village signing up checklist

This lists the steps to take when signing up to enter a retirement village.

Signing up checklist (PDF 1.1 MB)

Thinking of living in a retirement village? booklet

When you're considering moving to a retirement village, download our free booklet here: Thinking of living in a retirement village?

Retirement village information

Retirement village information – free phone 0800 268 269

For general information about retirement villages, free phone 0800 268 269. There's also more information on the Commission for Financial Capability website.

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