Change text size:   Increase font size   Reduce font size  |   Print page:   Print this page
  |   Contact us   

Retirement villages 

Retirement village operators in NSW are required to comply with laws that:

  • set out key rights and obligations for residents and operators,
  • ensure prospective residents are given important information before they sign a contract,
  • require village contracts to be in a standard form, and
  • provide a system for resolving disputes.

This section of the website provides information about the following:

Registration of retirement villages
Rights and obligations
Disclosure to prospective residents
Retirement village contracts

Recent changes to the law

On 1 September 2017, the Retirement Villages Regulation 2017 commenced. Key changes in the new Regulation include:

  • requiring copies of a village's insurance policy documents be available to residents
  • a new 'average resident comparison figure' (ARCF) in the Disclosure Statement to facilitate more effective comparison between villages – required for all disclosure statements after 1 March 2018
  • reducing the maximum amount payable for an operator's legal and other expenses to $50
  • adding new matters for which village rules can be created, including smoking in communal areas
  • requiring clearer information in annual budgets around head office expenses
  • lowering the maximum amount allocated for contingencies to $1
  • prohibiting additional matters that cannot be financed by recurrent charges
  • simplifying the process for allowing residents to hold office on a residents committee for longer than three years; and
  • allowing service of documents by electronic means.

Average resident comparison figure

The average resident comparison figure is an indicative figure based on a number of assumptions, such as the average stay of a village resident (7 years), and in some cases an estimated future selling price.

The ARCF can be used as a simple guide to more easily compare the costs of different village contracts, similar to a home loan 'comparison rate'. The ARCF should not be relied on in place of the terms of a contract. It is an indicative figure only and does not represent the actual outgoing payments made by a resident. Prospective residents should also use the Retirement Villages Calculator to get a more comprehensive picture of the costs of living in a village.

Calculating the ARCF

The ARCF must be included in Disclosure Statements from 1 March 2018. The ARCF is the sum of the following fees and charges over an assumed residency period of 7 years (84 months), averaged to a monthly figure:

  • the total amount of recurrent charges payable under the village contract
  • the departure fee payable by the resident if the premises are permanently vacated at the end of that period; and
  • the share of any variance between the original entry price and the entry price paid by the next resident ('capital gains'), if any, payable to the operator by the resident in respect of the unit.

The calculation is as follows:

(total amount of recurrent charges over 7 years + the departure fee payable after 7 years + the share of any variance in entry price to the next resident 'capital gain') ÷ 84 months.

Calculating an estimated departure fee or capital gains

In calculating the ARCF, you will need to calculate an estimate of the applicable departure fee and capital gain (if any).

Where the departure fee payable under the contract is based on the 'entry price', the original entry price is used to calculate the departure fee payable. 

Where the departure fee is based on the next resident's entry price, the next resident’s entry price can be estimated by using the applicable rate in Table 1 below for the relevant dwelling type (based on the current Australian Bureau of Statistics (ABS) data), over a 7 year period. The next resident's entry price can then be used to work out the estimated capital gain that may apply. See examples below.

The ABS data is updated each quarter and small variations can occur to previously published data. Operators should check the Fair Trading website, or the ABS data, regularly to ensure they are using the correct rates. 

Table 1: Percentage rate of property value increase each year

Type of dwelling


Rest of NSW

Median Price of Established House Transfers (unstratified) 7.48% 4.34%
Median Price of Attached Dwelling Transfers (unstratified) 6.76% 3.60%

Examples for calculating the ARCF

Example 1:

  • A detached, 2 bedroom villa within in a retirement village in regional NSW has an entry payment of $400,000.
  • The contract includes a fee of $300 each week in recurrent charges.
  • The departure fee is based on the next resident’s entry price. The departure fee is 4% each year for the first 3 years, and 3% each year for years 4 to 7.
  • The resident is entitled to 100% of any variance in their entry price and the next resident's entry price (capital gain).

Example 2:

  • An attached, 2 bedroom unit in the Sydney metropolitan area is available for an entry payment of $650,000.
  • Recurrent charges for the ongoing costs are $2,500 each month.
  • The departure fee is based on the next resident’s entry price. The departure fee is 5% each year for the first 3 years and 3% each year for years 4 to 7.
  • The Operator and resident share 50/50 in any variance in their entry price and the next resident’s entry price (capital gain).



Example 1

Example 2

Total amount of recurrent charges over 7 years (A) ($300 x 52 weeks x 7 years) = $109,200 ($2500 x 12 months x 7 years) = $210,000
Estimating the variation (capital gains) and next resident’s entry price (selling price) using the ABS data in Table 1 ($400,000 x 4.34% x 7 years) = $121,520 variance (capital gain)

$400,00 + $121,520 = $521,520 (new entry price after 7 years)
($650,000 x 6.76% x 7 years) = $307,580 variance (capital gain)

$650,000 + $307,580 = $957,580 (new entry price after 7 years)
The departure fee payable after 7 years (B) ($521,520 x 24%*) = $125,165

*(4% x 3 years) + (3% x 4 years)
($957,580 x 27%*) = $258,547

*(5% x 3 years) + (3% x 4 years)
Capital gains, if any, payable to the operator by the resident at the end of 7 years. (C) N/A = $0 ($307,580 x 50%) = $153,790
ARCF = (A + B +C)/84 ARCF = 2790 ARCF = 7409

Useful contacts

Aged & Community Services Association of NSW & ACT
Represents retirement village residential aged care and community care providers within the non-profit sector.
Level 3, 9 Blaxland Rd, Rhodes NSW 2138
Tel: 8754 0400 or 1800 424 770 (country callers)

Retirement Living Council
Represents retirement village operators, owners, managers, developers, investors and industry specialists across Australia. They can provide information on member villages.

Top of page