What are the costs of entering a village?

Depending on where you want to live in New Zealand, the cost of ‘buying’ into a retirement village can vary greatly – some units can be priced in the $100,000s while others can reach into the millions. This ‘purchase’ price is known as the Capital Contribution.

You can search for retirement villages within your price range on our website.

It's important to remember that 'purchasing' a dwelling in a retirement village is different from a standard property purchase. It is not an asset you own, like you might've had with your family home, but rather you own 'the right to live there'. This means that when you leave, you or your estate will receive the original Capital Contribution minus the Deferred Management Fee (DMF) and any other exit costs, and you are unlikely to receive a capital gain when you leave the village.

There are also other costs you’ll need to account for when entering a village, such legal fees. As a village ‘purchase’ is a complex legal arrangement that requires specialist, independent legal advice, legal fees can be more than for a standard property transaction.

Don't forget about the ongoing costs too

Retirement villages in New Zealand come with ongoing costs, such as weekly fees. These generally cover things like council and water rates, building insurance, security, external maintenance (including gardening), the upkeep of communal facilities, and staffing and management of the village.

You'll also still be responsible for your own personal expenses. This includes things like contents insurance, internal maintenance or repairs inside your home, power, phone and internet, and any paid TV or streaming services. Some activities and outings may also come with extra costs, so it's worth checking this in advance.

When you're comparing villages, it can be helpful to as the village manager a few questions, such as:

• Are the weekly fees fixed for life, or will they increase?If they increase, ask how often, by how much, and whether you have a say in this.
• What does the village insurance cover? Clarify what you'll need to insure yourself and who is responsible for excess payments if something happens. 
• What happens to the fees if your circumstances change? For example, if you go on holiday, spend time in hospital, or the number of people living in your unit changes.

• Are the fees ‘fixed for life’ or will they increase? If so, by how much and how often? Do you have a say in this?
• What does the village insurance cover? What do you need to insure? Who pays the excess?
• What happens to the fees if you go into hospital, go on holiday or the number of people in your dwelling changes?

Understanding both the village's fees and your personal costs up front will help you choose a village that fits your lifestyle and budget, and ensures there are no surprises later on.