How soon should retirement villages repay residents?
There has been considerable debate about how quickly retirement village operators should repay residents or their estates after a home is vacated.
In December 2025, the Government announced proposed reforms requiring operators to make capital repayments within 12 months. Interest would also be payable after six months if the home remained unlicensed.
Labour MP Ingrid Leary has proposed a shorter timeframe through a Member’s Bill. This would require operators to repay the lesser of 10% of the amount owing or $50,000 within five working days, with the remaining balance paid within 60 working days.
Neither proposal is currently law.
Much of the recent media coverage has focused on the views of residents and their families. You can read more about the Retirement Village Residents Association’s campaign for repayment within three to four months.
Faster repayment would give residents and their families greater certainty. However, it could also affect how retirement villages are funded and priced. If operators must repay residents before a home is relicensed, the additional funding costs could potentially be reflected in entry prices, weekly fees, deferred management fees or other contract terms.
To hear an industry perspective on what faster repayment requirements could mean for current and future residents, listen to this podcast featuring Oliver Hartwich and Michelle Palmer, Executive Director of the Retirement Villages Association. They discuss the different proposals and their potential implications.
Frequently asked questions
- The operator must update the former resident on the marketing progress each month.
- After three months, the operator must provide a written report explaining the steps taken to market the home and the progress made.
- After six months, the operator must obtain an independent valuation at its own expense to confirm a suitable marketing price.
- After nine months, the former resident may issue a dispute notice if they believe the operator has not handled the relicensing process appropriately.
- Require capital repayment within 12 months.
- Require interest to be paid after six months if the home remains unlicensed.
- Allow former residents to apply for earlier access to money in certain situations of need.
- Stop weekly fees and fixed deductions when the resident leaves.
- The lesser of 10% of the capital sum owing or $50,000 within five working days.
- The remaining balance within 60 working days.
Retirement village residents pay a capital sum for an occupation right agreement, which gives them the right to live in the home rather than ownership of the property.
When the agreement ends, the resident receives their original capital sum, less the deferred management fee and any other amounts they owe at that time.
Under the most common retirement village model, the outgoing resident is repaid after a new resident signs an occupation right agreement and pays their capital sum.
This means the operator does not generally fund the outgoing resident’s repayment before receiving money from the incoming resident. Some operators may offer earlier repayment or buyback arrangements, but this is currently neither required nor common.
In the podcast recorded in July 2026, Michelle Palmer, Executive Director of the Retirement Villages Association, says the average time to relicence a retirement village home is around seven to eight months, reflecting the slower wider property market. She says this had previously been closer to four to five months when property market conditions were stronger.
Actual timeframes vary depending on the village, location, type of home and asking price.
There is currently no maximum timeframe within which an operator must make the capital repayment after a resident leaves.
The Retirement Villages Code of Practice sets out steps operators must follow while a home is being marketed:
A former resident can also make a complaint about the sales process at any time.
For more information, read Leaving the village: How does the sales process work?
The Government announced proposals that would:
The financial exit changes would not apply retrospectively. They are intended to apply to occupation right agreements signed one year after the new legislation is passed.
The proposed Bill would require operators to pay:
Labour says its proposed changes would apply to both current and future residents. The Member’s Bill would need to be drawn from the ballot and passed by Parliament before becoming law.
Supporters argue that residents should not have to wait for their former home to be relicensed before receiving their money.
Faster repayment would provide greater certainty, particularly when someone needs the money to pay for aged care or another home, or when their family is managing their estate.
The Retirement Villages Association argues that requiring repayment before a home is relicensed would mean operators need to hold more cash or borrow additional money.
It says these costs could affect village pricing, future development and the financial position of smaller operators. The extent of any effect on entry prices, weekly fees or other contract terms is not yet known.
Have a comment?
If you’re considering a move to a retirement village, we’d like to hear what you think about both proposals. Should residents be repaid within 12 months, within 60 working days, or somewhere in between? Share your thoughts below.
