The biggest risk of Over-50’s (lifestyle) communities

The huge popularity of over 50’s (lifestyle) communities with younger retirees has seen the sector explode around the country over the past decade. With affordable homes and luxurious resort-style facilities, you could be forgiven for thinking that an over 50’s community is the answer to your downsizing dreams. However, there is a very real risk to living in these communities that you need to consider.

Over 50’s Communities ownership

In an over 50’s community, residents own the building (house) and lease or rent the block of land the house sits on. The lease or site agreement is typically issued under the auspices of the Residential Tenancies Act in the state where the community exists. The lease entitles the resident to occupy the lot and use the common property (community facilities).

Village fees

Residents in over 50’s communities pay the lease fee on a fortnightly or monthly basis. This fee is typically $250 per week or more, which is substantially higher than the fees charged by retirement villages. The reason the fees are so high vs retirement villages is that this is where the operator makes their money (this, and the 50%+ mark up on the new home they just built and sold you!). They also know they can charge a higher rate because most residents (if receiving any kind of government assistance such as part or full age pension) are eligible to receive the Commonwealth Rent Assistance payment. This can be up to around $75 per week if the resident receives the full age pension amount.

In fact, over 50’s community operators boast about this in their own annual reports:

Ingenia Communities Group (ASX: INA) – operates over 100 lifestyle and holiday communities across Australia. Ingenia’s annual reports consistently cite CRA as a key revenue driver.
Lifestyle Communities Ltd (ASX: LIC) – a major developer and operator of over-50s communities in Victoria, also highlighting the role of CRA in supporting recurring rental revenue. LIC has been in the news for charging exit fees to exiting residents, an uncommon practice in over 50’s communities.
Hometown Australia – majority owned by private equity firm Blackstone, with over 60 communities nationwide.
Stockland (ASX: SGP) – Stockland acquired Halcyon Communities in 2021 and continues to market high-end land lease homes for over-50’s around Australia.
Mirvac (ASX: MGR) – Mirvac has acquired Serenitas, a land lease operator, and continues to grow its exposure to the over-50’s sector.
GemLife – GemLife, a major over-50s land lease operator, floated on the ASX in July 2025. The company has over 5,000 residents and 20+ communities.

These companies directly benefit from public funds that were never intended to subsidise corporate profits.

In effect, taxpayers are underwriting rent revenue for institutional investors, often at the expense of more vulnerable renters in the broader private market.

Commonwealth Rent Assistance (CRA)

The CRA is a supplementary payment provided under the Social Security Act 1991, with the intention of assisting people who pay rent and are in receipt of a qualifying income support payment. The underlying policy objective of CRA is to reduce housing stress for low-income Australians who do not own their home and who face rising rental costs and homelessness in the private rental market.

It was never the intention of the CRA to support the profits of over 50’s community owners, where many residents are receiving CRA despite living in high-value, owner-occupied homes and having considerable liquid assets.

The application of the CRA in over 50’s communities is in stark contrast to the treatment of residents in retirement villages, where eligibility is tied to the value of the resident’s “entry contribution” and whether it exceeds the “Extra Allowable Amount” (EAA), currently defined by Centrelink asset thresholds. In those cases, if the resident pays an amount above the EAA (currently approx. $250,000), they are classified as homeowners and become ineligible for full CRA.

Land lease community residents, however, are not subject to the same scrutiny. This creates a loophole that allows relatively affluent retirees – some of whom have sold homes worth $1 million or more – to purchase a manufactured dwelling in a lifestyle community for $500,000–$900,000, retain large cash reserves, and still qualify for full CRA.

The last word

In my opinion, it is only a matter of time before the Commonwealth Government realises how this CRA loophole is being exploited by over 50’s community operators and shuts it down. Therefore, if you are considering moving into an over 50’s community and you need to receive the CRA in order to afford the lease fees, you may wish to reconsider.

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