Do I own my unit in a retirement village?

It depends on the tenure type. Options in Victoria include freehold or strata title (full ownership), loan lease (a contractual right to reside in exchange for an entry payment), and licence arrangements (common with not-for-profit operators). Each has different rights and obligations.

How does selling my family home to enter aged care affect my pension and assets test?

Your home remains exempt from the assets test for up to two years after entering aged care, or indefinitely if a spouse or partner continues to live there. Once sold, the proceeds immediately become assessable. A Refundable Accommodation Deposit is excluded from the assets test, but selling can increase your assessed assets under the aged care means test and raise ongoing care contributions.

What are the cooling-off and settling-in period rights?

For retirement village contracts signed after 1 May 2026, the cooling-off period is 7 business days. A settling-in period, if included in the contract, lets a resident trial village life without incurring exit costs. For residential aged care, a signed service agreement carries a 14-day pre-entry cooling-off period, and residents can withdraw within 28 days of entering care.

Aged Care and Retirement Living

Q: What is the difference between a retirement village and an aged care facility?

A retirement village is a lifestyle choice for independent older people who want community living with support nearby if needed, governed in Victoria by the Retirement Villages Act 1986. Residential aged care is for people who need regular medical or personal care that can no longer be safely provided at home, and is funded and regulated by the Commonwealth under the Aged Care Act.

Q: How is a Deferred Management Fee (DMF) calculated when leaving a retirement village?

For contracts signed before 1 May 2026, the DMF is usually a fixed percentage per year of the ingoing contribution, increasing to a capped percentage. For contracts signed on or after 1 May 2026, the Retirement Villages Amendment Act 2025 requires the DMF and other exit fees to be calculated by reference to the entry payment on a daily basis, with the formula and cap disclosed in the residence contract.

How we can help your Aged Care Business

The aged care and retirement living sector has been reshaped over the past 5 years. The Royal Commission into Aged Care Quality and Safety, the Retirement Villages Act 1986 (Vic) and the Aged Care Act 1997 (Cth) reforms that followed, and an ageing population producing sustained demand for new accommodation models, have produced a regulatory environment unlike anything the sector has dealt with before. As experienced aged lawyers n Melbourne for operators, developers, investors and land lease community operators on structuring, M&A, compliance and disputes.

Residence Contracts
Structuring Advice
Conveyancing of Retirement Living Contracts
Mergers and Acquisitions (Aged Care)
Land Lease Communities
Privacy
Disputes (Aged Care)

Residence Contracts

We draft and review retirement living residence contracts for operators and provides independent legal advice to residents when an operator proposes contract changes. That dual perspective informs how we approach both sides of the work.

What we do

Drafting and updating retirement living residence contracts

Operator-side compliance review of existing contracts

Independent legal advice to residents on proposed contract changes

Peer review of national operator contract structures

Industry consultation and legislative reform input

Discuss your matter

Structuring Advice

We advise on the structures used to acquire, develop and operate retirement living communities, including corporate and trust structures, resident tenure models (leasehold, licence, strata, company title, land lease), and financial models (ingoing contributions, ongoing fees, deferred management fees). Multiple-offering communities are an increasing area. We work alongside accountants, so the legal structure aligns with the tax position.

What we do

Corporate and trust structuring for acquisition and operation

Resident tenure model selection

Financial model design and disclosure

Multiple-offering community structuring

Coordination with accountants and financial advisers

Restructure of existing communities

Discuss your matter

Conveyancing of Retirement Living Contracts

Conveyancing for retirement living dwellings carries every issue that ordinary residential conveyancing has, plus the overlay from the Retirement Villages Act 1986 (Vic) which is unique to Victoria and Melbourne.

We conduct conveyancing transactions for operators rolling out new releases and for incoming residents. For operators, we manage volume conveyancing alongside individual advice to each new resident.

What we do

Operator-side conveyancing for new and resale transactions

Resident-side conveyancing for incoming residents

Ingoing contribution and DMF disclosure

Retirement villages legislation and cooling-off compliance

Volume conveyancing for new releases

Settlement coordination with operator finance teams

Disclosure document refresh and version control

Discuss your matter

Mergers and Acquisitions (Aged Care)

We advise operators and investors on acquisitions and divestments of retirement living communities, including portfolios and co-located retirement village, residential aged-care and home-care assets. The work runs from pre-sale corporate restructuring through to regulatory approvals and corporate finance.

What we do

Acquisition and divestment of communities and portfolios

Co-located retirement, aged-care and home-care transactions

Pre-sale corporate restructuring

Operational and development due diligence

FIRB approvals and foreign investment compliance

Regulatory approvals under Aged Care and Retirement Villages legislation

Employment and resident continuity issues

Corporate finance and capital raising for transactions

Discuss your matter

Land Lease Communities

Land lease communities are an expanding segment of seniors’ accommodation, with residents own their dwelling but lease the underlying land, which produces a different legal, regulatory and tax profile from a retirement village.

We advise developers and operators on land lease community establishment, site agreements, resident contract materials, and the broader operational and structural questions.

What we do

Land lease community establishment and structuring

Site agreements and resident contract materials

Regulatory compliance under Victorian legislation

Site fee, utility and management fee structuring

Disputes and breach matters

Acquisition and divestment of land lease communities

Capital raising for community development

Discuss your matter

Privacy

Aged-care and retirement living operators hold significant volumes of personal and sensitive resident, family and staff information.

We advise on privacy policies, data handling, mandatory data breach notification, staff training, privacy impact assessments, OAIC engagement, and the response to resident and family access requests under the Australian Privacy Principles.

What we do

Data handling and breach response procedures

Staff training on privacy compliance

Privacy impact assessments

OAIC investigation and complaint responses

Mandatory data breach notification

Resident and family access requests

Discuss your matter

Disputes (Aged Care)

Resident disputes in retirement villages and aged-care facilities sit across Australian Consumer Law claims, breach of residence contract under the Retirement Villages Act 1986 (Vic), compliance breaches, and disputes about fee calculations, exit entitlements and reinstatement obligations.

We act for retirement living operators in Melbourne on resident dispute strategy, tribunal and Supreme Court representation, and community-wide dispute management where a single matter is at risk of becoming a class issue.

What we do

Resident dispute strategy and resolution

Australian Consumer Law claims

Breach of residence contract claims

Compliance and regulatory breach disputes

Fee calculation, exit entitlement and reinstatement disputes

Tribunal and court representation

Community-wide dispute management strategy

Discuss your matter

How we can help your family

If you or a family member is considering a retirement village or land lease community, the residence contract is one of the most important documents you will sign and one of the least understood. We act for individuals and families on independent contract advice and conveyancing into the village.

Residence Contracts
Conveyancing of Retirement Living Contracts

Residence Contracts

If you or a family member is considering a retirement village or land lease community, the residence contract is one of the most important documents you will sign and is often one of the least understood. It is a contract sets the rules for how you live in the community, what you pay (now and on exit), what you can change about your home, and what happens when you leave.

We provide residents with independent legal advice on residence contracts before signing, and on proposed changes once you’re in the community. Our role is to make sure you understand what the contract says, not what you’ve been told it says before you commit.

What we do

Independent legal advice on retirement village contracts

Independent advice on land lease community contracts

Review of proposed contract changes in-community

Advice on ingoing contributions and deferred management fees

Industry consultation and Advice on exit entitlements and reinstatement obligations

Cooling-off rights and disclosure document review

Disputes about contract terms or operator conduct

Discuss your matter

Conveyancing of Retirement Living Contracts

Buying into a retirement village or land lease community is a property transaction with some unique features for incoming residents. The legal arrangement may be a strata lot, a leasehold, a licence or a company title under the Retirement Villages Act 1986 (Vic) which all works differently from each other, and the contracts include ingoing contributions, deferred management fees and exit calculations that ordinary residential conveyancing doesn’t.

We act for individuals and families buying into retirement living, handling conveyancing alongside the independent legal advice on the residence contract.

What we do

Conveyancing for retirement living purchases across all tenure types

Independent legal advice on the residence contract

Disclosure document review

Ingoing contribution and DMF analysis

Cooling-off period advice

Settlement attendance and post-settlement matters

Coordination with family members and financial advisers

Discuss your matter

Frequently Asked Questions

Disclaimer : The information contained in these FAQS is of a general nature only and does not constitute legal advice. It has been prepared by KPA Lawyers without considering your specific objectives, circumstances or needs, and should not be relied on as a substitute for tailored legal advice.

Planning for later life can feel overwhelming, especially when you’re trying to understand the difference between a retirement village and an aged care home. Although on the face of it, these living options seem similar, they are actually very different in terms of the facilities and services offered, the cost and critically who they suit.

What Is a Retirement Village?

A retirement village is a residential community designed for older people who are still able to live independently, but want a simpler lifestyle, a sense of community, and the security of having help nearby if needed. Entry into a retirement village is best summed up as a lifestyle choice.

Residents in retirement villages live in their own self-contained accommodation in the same way they now live in the family home. The village provides shared amenities such as pools, gardens, community halls, and sometimes a café or library. Some villages also offer optional on-site services like a cleaner, a hairdresser, or a visiting nurse on a user-pays basis.

In Victoria, retirement villages are governed by the Retirement Villages Act 1986 (Vic) as amended by the Retirement Villages Amendment Act 2025, which came into force on 1 May 2026.

What Is Residential Aged Care?

Residential aged care, sometimes referred to as a nursing home, is for older people who need regular medical or personal support that can no longer be safely provided at home. Residents are often placed into aged care when they can no longer live independently, perhaps because of frailty, dementia, a serious illness, or simply the need for assistance with everyday tasks.

Unlike a retirement village, aged care homes provide around-the-clock nursing care, allied health services (such as physiotherapy and occupational therapy), meals, and accommodation to residents all in the one place . Residential aged care in Australia is funded and regulated by the Commonwealth government under the recently updated Aged Care Act 2025.

Which option is right?

When deciding on which option is right for you or a family member, the key factors to consider are independence and level and kind of support the accommodation needs to provide.

Retirement villages suit retired people who are healthy and active, want to downsize, and enjoy the social benefits of community living, but don’t yet need ongoing medical care.

Aged care homes suit people who need regular, often complex health care that goes beyond what can reasonably be delivered at home.

Many people follow a natural progression from the family home into a retirement village while still independent, followed by a transition to aged care later if their health declines.

The DMF is calculated in accordance with the provisions of the residence contract. For contracts signed before 1 May 2026, it is usually calculated as a fixed percentage per year of the new ingoing contribution. The percentage increases each year, usually to a capped percentage of around 30%.

For contracts signed on or after 1 May 2026 , the Retirement Villages Amendment Act 2025 (Vic) (Act)and Retirement Villages Regulations 2026 (Regs)came into force, bringing with them a significant overhaul of the retirement village legislation. One of the big changes was to the calculation of the DMF and other exit‑related fees. Now, the DMF and other exit‑related fees must be calculated by reference to the entry payment and on a daily basis, with the formula and cap disclosed in the residence contract and Information Statement.

In Victoria, retirement village tenures commonly fall into one of the following categories:

Freehold/strata title
The resident purchases a strata or other freehold title to the unit, becomes a member of the owners corporation and is recorded as registered proprietor on the land titles register, subject to the Retirement Villages Act 1986 (Vic) and the residence contract. The resident is an owner in the conventional sense, with all the usual proprietary rights, plus village‑specific obligations.

Loan Lease

The resident pays an entry payment to the operator and receives a contractual right to reside in a specified unit and use village facilities. In a residence right scenario, you enter into a “residence contract” governed by the Retirement Villages Act 1986 (Vic) and associated regulations and by general contract and consumer law. An entry payment is paid in exchange for an exclusive right to reside in the unit and to use common facilities, subject to rules and payment of maintenance charges.

Licence

The resident has a licence to occupy the unit under certain conditions such as not altering the property ort gardens. This for of tenure is most commonly used by ‘not for profit’ operators.

Each tenure type has its own pros and cons. If you are thinking of entering a retirement village, please contact us; we would happy to discuss your options and review the residence documentation provided by the operator.

Selling your home to enter into aged care creates some complex scenarios for consideration. The two biggest considerations are the assets test for the pension, and the aged care means test.

Assets test

If you leave your home to enter residential aged care, your home remains exempt from the assets test for up to two years from the date you move into aged care. You will continue to be treated as a “homeowner” during this time, which means the lower homeowner asset thresholds apply. If your spouse or partner continues to live in the home, the assets test the exemption lasts indefinitely.

Once the two-year exemption period expires and presuming no spouse or partner lives in the home, you are no longer treated as a “homeowner” for the purposes of the assets test. Although you have a higher threshold for the assets test as a “non-homeowner”, if you home is worth a significant amount, you may exceed the cut-off and lose your pension.

It is important to note that once you sell your home, your home’s exemption ends immediately, the sale proceeds immediately become assessable assets. Similarly, if you vacate your home and rent it out, the assets test exemption end immediately.

However, payment of a Refundable Accommodation Deposit or RAD, to an aged care facility is excluded from the assets test.

Aged care means test

The aged care means test determines the fees you pay for your care in the aged care facility.

If you keep your home and no protected person lives there, its value is counted — but capped. If you sell your home, the full sale proceeds are counted, which usually means your care contributions will increase.

Selling your home to pay a larger RAD can reduce your daily accommodation costs, but any difference between the sale price and the RAD may increase your ongoing care contributions.

Cooling off

The cooling off period is a right granted under the retirement villages legislation. For residence contracts entered into after 1 May 2026 the cooling-off period is 7 business days from the date of signing.

Settling-In Period

The settling-in period is a contractual right, but if included in the contract, it must comply with the requirements of the Retirement Villages Act 1986 (Vic).

The settling-in period gives the resident on opportunity to see if village life is for them without incurring all the costs of exiting under the residence contract if village life does not suit. Generally the DMF is not triggered, and the resident will only pay recurrent maintenance charges/service fees and fair market rent for the time in occupation.

Residential Aged Care

Pre-Entry Cooling-Off (Service Agreement)

A prospective permanent resident who has signed a service agreement but not yet entered care, has a 14-day cooling-off period from the date of agreement.

Post-Entry Withdrawal (Service Agreement)

Once the resident has entered the aged care home, the resident is entitled to withdraw from the service agreement within 28 days of agreeing to it.

· Notice may be given verbally or in writing.

· If withdrawal is exercised within 28 days, the agreement has no effect.

· The resident remains liable for fees and charges for care actually received during that period.

· The provider must refund all other amounts paid under the agreement.

· This right must be expressly stated in the service agreement.

Higher Everyday Living Fee Agreement

If a resident separately agrees to a higher everyday living fee, they have 28 days to cancel that optional agreement after entering into it. After 28 days, cancellation remains possible by giving 28 days’ notice at any time.

Accommodation Agreement

From 1 November 2025, the accommodation agreement must be entered into before the resident enters care. There is no distinct cooling-off period for the accommodation agreement itself.

Why KPA Lawyers for Aged Care and Retirement Living

The firm that puts your outcome first

We combine senior expertise with genuine care, your matter will be handled by an experienced lawyer every step of the way.

Experienced aged care lawyer on every matter

An experienced lawyer involved at every stage is involved at every stage, working alongside our wider team to ensure your matter is handled the right way.

Work with commercially minded lawyers

Our commercial lawyers bring a strategic measured approach to your matter.

Three conveniently located offices

Visit our Sandringham or Mornington offices or meet with us in the Melbourne CBD, whichever location is most convenient for you.

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Our Team

The Aged Care and Retirement Living TEAM

You get direct access to senior legal minds who actively steer your strategy, giving you the clarity and financial certainty you need to move forward with confidence.

Nancy D’Arcy

ASSOCIATE

Nancy is a commercial lawyer who works closely with clients to help them complete transactions efficiently and with...

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Boris Escobar

SENIOR ASSOCIATE

Boris joined KPA Lawyers in 2018 and is part of the Property and Commercial Law team. He practices...

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