Strata Title Tenure
Legal
With a strata title residents purchase a freehold title to the unit, but their ownership only extends to the space within the accommodation itself and not to the land or structures built on it. The latter are common property which is owned by a body corporate or association owned by the unit owners. About 10-12% of retirement village units are owned on a strata title basis.
Two entities may be involved in the management of a Strata title village; the Strata manager appointed by the body corporate to manage the common property and provide certain property-related services, and another manager focussed on providing retirement related services, such as emergency response and transport services, and a range of optional personal services.
Often, and this is common sense, the same organisation will perform both functions, and will have been appointed to do so since the development of the Village. Care needs to be taken however to ensure that these activities are carried out on a competitive, cost efficient basis, and have not been constructed to simply provide (another) income stream to the developer.
Financial: Entry and Exit
Residents purchase a unit with the purchase price less any departure fees paid to the previous owner. Note that if you are purchasing a new unit then GST may be payable, and that GST could also be payable in relation to any departure fees - as they may be considered as part of the total price paid for the unit. You will normally have to pay stamp duty if your tenure is freehold, strata, community or company title.
We address Exit and Departures fees in much more detail elsewhere, but note that you will not see any funds returned after vacating a unit until it is sold and settlement concluded.
Ongoing Costs
The same costs applies as with Lease and License accommodation, but bear in mind that Strata levies will be payable to the body corporate - for the maintenance and upkeep of the common property, and probably including a "sinking fund" component - and fees to the operator for the provision of general management services and the maintenance of any shared assets (eg. Village bus). If the property is an individual's main residence there will normally be no liability for land tax, but council rates may be payable.
If you would like to arrange professional advice in relation to the above matters, please complete the Inquiry form below providing details and you will be contacted accordingly. You will receive a fee quotation in advance of any advice or services being provided.