Retirement Villages in Victoria: A Practical Guide for Residents and Families

What Is a Retirement Village Under Victorian Law?

A retirement village is a scheme that satisfies the statutory definition in the Retirement Villages Act 1986 (Vic). In broad terms, the Act applies where persons predominantly retired from full-time employment or their spouses reside under a contract that involves the payment of an in-going contribution and confers a right of residence. Not every seniors-only development is a retirement village in the statutory sense — whether the Act applies is a legal question to be tested against the statutory definition and, where relevant, Consumer Affairs Victoria guidance.

A retirement village is distinct from residential aged care regulated by the Aged Care Act 2024 (Cth), which has been in force since 1 November 2025 and governs Commonwealth-funded residential aged care. It is also distinct from a residential rental scheme governed by the Residential Tenancies Act 1997 (Vic). Residents who later require personal or nursing care generally need a separate aged-care service; that transition may be available on the same operator's site or may require a move to a separate facility depending on the operator's arrangements.

Tenure and Structure

Victorian villages operate under a range of tenure structures. Residents may hold:

• freehold or strata title to the unit;
• a long lease, which may be registered or unregistered;
• a licence to occupy conferring a personal right without a proprietary interest;
• shares under a company-title structure; or
• units in a unit-trust structure.

The tenure structure affects who owns the land and improvements, the resident's proprietary rights during occupation, the treatment of capital gain or loss on resale, the process on death and any interaction with an owners corporation. Two contracts with the same headline tenure can nevertheless produce different financial outcomes because entry, ongoing, departure and capital-treatment terms are contract-specific.

The Act distinguishes "owner" residents from "non-owner" residents as statutory categories under the Retirement Villages Act 1986 (Vic). Owner residents typically hold a proprietary interest and bear the market risk on resale; non-owner residents typically hold a contractual right of residence without an equity interest. Rights and obligations differ accordingly.

Payments and Financial Arrangements

The financial architecture of a retirement-village contract may include some or all of the following elements, each of which is governed by the contract and the Act rather than by fixed market conventions:

• an in-going contribution (variously described as a purchase price, loan or ingoing);
• recurrent maintenance or service charges for day-to-day village operations;
• a contribution to a capital maintenance fund and, in some cases, a capital replacement fund;
• a departure fee or deferred management fee, structured by reference to the contract's own formula and subject to the disclosure requirements and statutory controls that apply to that contract;
• refurbishment or reinstatement obligations on vacation;
• any share of capital gain or loss agreed in the contract; and
• the timing of any exit entitlement.

The precise components, formulae, caps and offsets vary between contracts. No single industry percentage or formula is representative. Prospective residents and their advisers should model the specific contract, including outcomes at multiple potential exit points, before signing.

The 1 May 2026 Reforms

The Retirement Villages Amendment Act 2024 (Vic) and the Retirement Villages Regulations 2026 (Vic) (SR 25/2026) made significant changes to the pre-contract, contract and exit stages. The principal reform provisions commenced on 1 May 2026; the prescribed standard-form contract regime commences on 1 September 2026. The principal changes relevant to contracts signed on or after 1 May 2026 are:

• Information Statement. The operator must provide a signed Information Statement in the prescribed form at least 21 days before the contract is signed. The Information Statement replaces the previous disclosure statement.
• Cooling-off period. A resident has seven business days from the day the resident signs the contract in which to cool off.
• Conditional settling-in period. A settling-in period applies on the terms set out in the Act.
• Exit-entitlement timing. The exit entitlement must be paid by the earliest of the date fixed by the contract, a date otherwise agreed between the resident and the operator or proprietor, and 12 months after the resident delivers up vacant possession of the premises. Separate timing rules can apply where a resident exits within a qualifying settling-in period.
• Standard-form contract. From 1 September 2026, new retirement-village contracts must be entered into using the prescribed standard-form contract under the Retirement Villages Amendment (Standard Form Contracts) Regulations 2026 (Vic) (SR 105/2026).

Contracts signed before 1 May 2026 continue to operate under their existing terms and the version of the Act and Regulations that applied at signing, subject to the transitional provisions in the amending legislation.

Village Rules and Services

Village rules govern day-to-day matters such as noise, visitors, pets, parking and use of shared facilities. Rules generally form part of the contract and may be amended in accordance with the Act's consultation requirements. Services may be provided directly by the operator, through a service company, through an owners corporation or through third parties, and any related fees are set by the applicable contract and constitution.

Disputes

The Act contemplates internal dispute-resolution procedures at village level, the Consumer Affairs Victoria conciliation service known as VicAssist Retirement Villages, and applications to the Victorian Civil and Administrative Tribunal in cases within the Tribunal's jurisdiction. The appropriate pathway depends on the nature of the dispute (for example fee disputes, refurbishment disputes, rule changes, alleged breaches of statutory obligations or exit-entitlement calculations), the parties involved and any pre-conditions in the contract or the Act. Conciliation is not invariably a jurisdictional precondition to a VCAT application.

Leaving the Village

A resident's ability to leave and the financial consequences depend on the tenure structure, the specific contract terms and the applicable version of the Act. The process may involve giving notice, vacating the unit, refurbishment or reinstatement obligations, resale or reallocation of the residence right, and the calculation and payment of any exit entitlement. For contracts signed on or after 1 May 2026, the exit entitlement must be paid by the earliest of the date fixed by the contract, a date otherwise agreed between the resident and the operator or proprietor, and 12 months after the resident delivers up vacant possession of the premises. Separate timing rules can apply where a resident exits within a qualifying settling-in period. Earlier contracts continue under their own timing terms.

Termination may also arise in other circumstances (for example by the operator on statutory grounds, or on the resident's incapacity or death). Each termination pathway has its own procedural, notice and financial consequences under the contract and the Act.

Death, Capacity and Estate Authority

On the death of a resident, the executor or administrator deals with the operator on behalf of the estate. The estate's rights and obligations — including any exit entitlement, continuing recurrent charges and refurbishment obligations — depend on the contract, the tenure structure and the Act. Where a resident loses capacity, an attorney under an enduring power of attorney or an administrator appointed by the Victorian Civil and Administrative Tribunal may act within the scope of the relevant appointment.

Where the village is part of an owners-corporation arrangement, the owners corporation's rules, levies and statutory obligations under the Owners Corporations Act 2006 (Vic) apply concurrently with the retirement village framework.

When to Obtain Advice

Independent legal advice tailored to the specific contract is warranted before signing, during the cooling-off and settling-in periods, on any material variation, on any significant fee dispute during residence, and at exit. Financial and accounting advice on the long-term affordability of the arrangement and its interaction with aged-care means testing and estate planning is a separate exercise that should be coordinated.

For related material see our companion articles on what to check before signing a retirement village agreement, retirement village contracts explained and leaving a retirement village, together with our retirement living and aged care service page.

Frequently Asked Questions