Capital Gain Value Surrendered by Village Residents

Capital Gain values surrendered by retirement village residents can be substantial over the life of a village. Some of the large operators in the retirement village industry do not grant any of the capital gain in the value of the units to the resident.

This has a negative impact on residents over time should they choose or need to return to the property market or as a result of an aged care assessment they wish to enter an aged care facility of their choice. The only option may be to accept a government funded placement which can be geographically away from family and loved ones.



The table above shows that for a village of 100 units and a modest annual capital gain increase of 2.85% the capital benefit lost to residents as a result of their contract can be in the order of ten plus million dollars per 7 year occupancy cycle. (The industry average retirement village occupancy period is 7 years)