Boutique

Lifestyle Village

Disclaimer – All information contained herewith is accurate at time of publication - 4th July 2014 1

THIS WORKSHOP WILL COVER:

■ Living Options in Retirement

■ Lifestyle Deliberations

■ Financial Options

2

MOST OPTIONS REQUIRE:

■ Lump sum up front fee Ingoing contribution, sales price, bond, etc

■ Ongoing monthly feeMaintenance, admin, service fees or charges, Owners Corporation, etc

■ Exit fees i.e.

Deferred Management fees, Retention Payments, etc.

3

RESIDENTIAL OR AGED CARE FACILITIES

■ Independent living, low or high care - covered under the Aged Care Act 1997 – Federal

■ ACAS Assessment – Applies to low care and high care

■ Bond or no bond

■ Care and service charges

■ Retention payments

4

RETIREMENT VILLAGES

■ Covered by the Retirement Villages Act Victoria 1986 and amendments – Different for each State

■ Loan Licence option, Leasehold option

■ Deferred Management Fee (DMF) or exit fee

■ Security and guarantee of tenure. Notice on title, Section 29 charge protects life time tenure

■ Regulator - Consumer Affairs/VCAT

5

LIFESTYLE VILLAGES, RESIDENTIAL ESTATES AND RENTAL VILLAGES

■ Covered under the Residential Tenancies Act 1997 – Caravan Parks, Moveable Dwelling Provisions and Civil Contract Law

■ Strata title; long-term lease or licence; company title; unit trust; periodic tenancy.

■ May own dwelling but usually no ownership by title

■ Pay a ground rent or lease

■ May qualify for Rent or Fee assistance

■ Regulator - Consumer Affairs / VCAT

6

LIFESTYLE DELIBERATIONS

Safety / Security

■ Private property – controlled access

■ Emergency call systems

■ Staff and neighbours

■ Peace of mind for family

■ Peace of mind when travelling

7

LIFESTYLE DELIBERATIONS

Community Connectivity

■ Amenities i.e. Club House / Community Centre

■ Friendships and companionship

■ Programmed activities and events

■ Family friendly

8

LIFESTYLE DELIBERATIONS

Downsizing = Less Maintenance

■ Less housework

■ Less gardening

■ Less building maintenance

■ Increased leisure time

■ Reduced stress and worry

9

LIFESTYLE DELIBERATIONS

Health

■ Challenges of ageing

■ Proximity to hospitals, health professionals and Community Health Services

10

LIFESTYLE DELIBERATIONS

Affordability

■ Financial position underwrites your lifestyle

■ Capital investment vs income

■ Asset rich, cash poor

11

MOUNTAIN VIEW FINANCIAL OPTIONS

Mountain View offers 2 financial options to acquire a villa

■ Resident Contract – Loan Licence (home owner)

■ Leasehold Agreement – Leasehold (non home owner)

■ Both secured with a refundable EOI deposit

12

SNAPSHOT OF COSTS AS A HOME OWNER BEFORE DISCRETIONAL SPENDING

Rates $ 1800.00 pa

Sewer/water $ 1600.00 pa

Building Insurance $ 500.00 pa

Gas/electric Connection $ 550.00 pa

Phone Connection $ 250.00 pa

Total $ 5250.00 pa

Discretional spending, home maintenance, home improvements, gardener, gas, water, electricity use

13

COMPARITIVE STUDY

14

RESIDENT CONTRACT LOAN LICENCE LEASEHOLD

Lifetime tenure to occupy Yes Yes

Resident holds title No No

Share in profits or capital gain Yes No

Deferred Management Fee Yes No

Loan licence repaid when resident leaves

Yes Not applicable

Resident is classed as a home-owner for pension purposes

Yes

No entitlement to a rent or fee subsidy

from DHS

No

Possible entitlement to a rent subsidy

from DHS

15

RESIDENCE CONTRACT

LOAN LICENCE OPTION

Incoming price for villa

Villa 3 bedroom - $359,495

Villa 2 bedroom - $339,495

16

RESIDENCE CONTRACT

LOAN LICENCE OPTION

Annual Service Fees:

■ $5,864 pa paid monthly ( i.e. $113 per week )

Covers: Rates (council, sewer & water), insurances, 24hr emergency call systems, lawns and gardens, maintenance of buildings and common areas, Community Centre facilities, amenities & on-site management

■ Subject to annual CPI increases

17

RESIDENCE CONTRACT – LOAN LICENCE

When a resident leaves and the villa is resold the following fees apply:

■ Less an administration fee @ 2.5%

■ Less a long term maintenance fee @ 3%

■ Less the agreed refurbishment costs shared 50/50

■ Less a Deferred Management Fee - 20% of initial purchase price

■ A 50/50 share in the capital gain of the villa

The payment of service fees stops after a maximum of 26 weeks or when the villa is resold, which ever occurs first.

18

Leasehold Agreement LEASEHOLD (NO SHARE IN CAPITAL GAIN) Incoming price for VillaIncoming price for Villa

Villa A, B & C $146,500Legal and admin costs $6,500Total $153,000

If a resident leaves anytime in the first 8 years, they are entitled to receive a pro rata rebate per annum of the $146,500 as per the following table:

Year 1 $128,187.50 Year 5 $ 54,937.50 Year 2 $109,875.00 Year 6 $ 36,625.00 Year 3 $ 91,562.50 Year 7 $ 18,312.50 Year 4 $ 73,250.00 Year 8 Nil

19

Leasehold Agreement

LEASEHOLD (NO SHARE IN CAPITAL GAIN)

Annual Service Fees:

■ $11,073 pa, paid monthly (i.e.$213 p.w.)Covers: Rates (council, sewer & water), insurances, 24hr emergency call systems, lawns and gardens, maintenance of buildings and common areas, Community Centre facilities and amenities, on-site management

■ Subject to annual CPI increases

■ Less potential of DHS rent & fee rebate of $3,338.40 pa

■ If rent assistance applicable, then net service fees would be $7,734.60 pa indexed or $148.80 week.

SUMMARY

■ Review your financial situation, age and health

■ Review your income needs and accessible cash requirements for your lifestyle plan

■ Review estate planning principles

■ Review your wills and powers of attorney.

20

Freedom…

QUESTIONS?

21