What is a Land Lease Community?
This weeks blog will focus on the security of land lease communities, both physical and financial.
Australia’s land lease community industry is booming, most notably due to the rising number of over 50s who are choosing this as their preferred retirement community living model. Land lease communities are also known as lifestyle communities, residential parks or manufactured or modular home estates. Typically in a land lease community, purchasers buy a home which they then own and then rent the land on which the home is located. This approach removes the upfront land cost and along with Commonwealth rents assistance, introduces much greater affordability.
Lifestyle communities originally originated from the concept of permanent residents living in caravan parks but have since flourished into a purpose-built over 50s resort-like estate with stunning new dwellings which more like new display homes than pre-fabricated cottages.
Over the last 10 years, many older Australian’s have been sceptical of lifestyle communities due to a few bad eggs claiming to be operators and tarnishing what is otherwise a very credible industry developing affordable housing options for older Australians. Hon. Mick Murray the Minister for Seniors and Ageing stated at the Edenlife Grand Opening that the government rules and regulations around lifestyle communities are more stringent and safer than ever before.
What differentiates Edenlife from other retirement living models is the wide range of resort-style facilities available right now, focus on affordability, social environment and most importantly, no exit fees. This also provides residents with a financial bonus. There are significant concession advantages available to land lease living is helping to drive a nationwide boom in new communities.
Firstly, because the land is separated from homeownership, stamp duty on the land doesn’t apply. Stamp duty thresholds change depending on the price of land but a block in Western Australia valued at say $300K ends up sitting at about $10,000-$15,000 worth of savings.
Secondly, purchasers can be eligible for the commonwealth rental assistance, and in doing so can claim around $130 a fortnight from the Commonwealth government. All this adds up to achieving greater affordability for older Australians as well as ensuring that appropriately approved and managed land lease communities, both physically and financially, are as safe as houses.
More and more, older Western Australian’s are starting to appreciate the real advantages of living in a lifestyle or land lease community and joining the trend that has been part of the rapidly expanding sector East Coast.