The exit fee is usually known as the deferred management fee, or DMF, and is the most common financing model for Australian retirement villages.
However, not all of our contract options include exit fees. Read on to learn more about the DMF model, as well as other contract options to manage your exit fees.
Exit fees are based on the contract you signed when you moved in. These fees might include a Deferred Management Fee (DMF), calculated as a percentage of either the sale price or the original purchase price, depending on your agreement. Additionally, any deposits or contributions you made will be refunded according to the terms of your contract.
"The contract signed upon moving in determines the exit fees, but we are there to guide and support residents through the process,", says Victorian Regional Sales Manager Mary Swane. "We assist in getting the home ready for resale and work to bring the property into a marketable condition to attract a suitable buyer."
Our CEO Nathan Cockerill further adds some context about home reinstatements should you choose to leave the village. "We handle the reinstatement of the unit, including carpet, paint and electricals. If more modernisation is needed, such as a new kitchen or bathroom, we enter into a separate contract to ensure residents are not financially worse off."
Under the DMF model, you defer payment of your management fees until after you leave the village. This means you can buy your retirement home at a more affordable price and defer part of the cost of living in the village until after you leave.
The deferred management fee is suitable for those who prefer to have more cash in the bank to enjoy their retirement years.
The amount of DMF you pay when you leave depends on different factors, such as:
The amount of exit fees you will have to pay depends on a few factors, most importantly the contract type you chose when moving into one of our villages as well as your length of stay and how much reinstatement work will have to be done to sell the house.
Looking at re-sales from 2023 onwards and with a minimum stay of 5 years or more, here's what the average exit fees are across our 65+ retirement villages.
Bedrooms | Min | Median | Max |
1 | $28,000 | $93,204 | $252,000 |
2 | $24,30 | $119,116 | $568,750 |
3 | $27,946 | $118,500 | $536,250 |
Example: If you have a resale price of $720,000 for the unit and a DMF percentage of 35%, the exit fees would be $252,000.
In terms of Capital Gain on the sale of the property, here is what that looks like without any upgrades to the villa or apartment:
Bedrooms | Capital Gain |
1 | $172,500 |
2 | $522,500 |
3 | $487,500 |
Capital Gain on sale of property (excluding upgrades)
If we do determine that the retirement villa or apartment needs refurbishment work, here's the average Capital Gain on any uplift in value after the refurbishment works:
Bedrooms | Capital Gain |
1 | $28,875 |
2 | $176,212 |
3 | $162,385 |
Capital Gain paid to owner on any uplift in value after refurbishment
Don't think the DMF exit fee sounds right for you? Then one of these 3 alternative options might be the better choice for your circumstances:
➡️Learn more about the different contract options here.
Our sales expert will be able to show you the price you pay on entry and your estimated entitlement when you leave, based on 10 years of occupancy. They will also have the calculation mapped out across the different contract options on one handy page, providing complete transparency so you can make an informed decision.
For more information about the lifestyle and support offered at our retirement villages, call our customer service team on 1800 550 550 or send us an email here.
If you think your family or friends might enjoy this article, please share it with them.
