While retirement should conjure up pleasant images of a rewarding and relaxing lifestyle, investment options such as life rights, can be confusing.
The first priority for considering your retirement is to decide how you want to enjoy your retirement and it’s important to find somewhere to live from your active years right up to the possibility of assisted living and frail care. You want to be financially and physically secure and your other considerations will be around expenses and what you want out of your retirement.
The Life Right model provides you, and in the case of Napier Retirement Village your spouse, the right to occupy a unit or cottage for the rest of your life or until you sell that right.
Life right falls under the Housing Development Scheme for Retired Persons Act, protecting buyers financially. No transfer duties, registration fees or value added tax are payable. Several life right options are available, providing fixed levies and limited capital recovery or variable levies for full capital recovery.
In many ways, the legal structure is really of secondary importance when looking at the structure of the individual retirement village with regards to levies and on-sale conditions. The standard of services in retirement villages has a direct influence on the reputation of a village and therefore the value of the units at re-sale.
At Napier Retirement Village, in the event of a sale, the outgoing resident or deceased estate receives the proceeds of the sale less 7.5% that will go to the Trust as a sales/marketing management fee, and 7.5% to the levy stabilisation fund controlled by the executive committee of the Napier Retirement Village Management Association. The value of the unit will be market related, which means that the resident is bound to see an increase in value of their unit over time.
This levy stabilisation fund contributes towards the running of the village and help keep monthly costs low, removing much of the inflationary risk.
Some are some of the questions we are most frequently asked:
Q: How old should you be to buy under this method and is there an age limit?
A: A holder can buy at any age as an investor, but can only be an occupant from the age of 50.
Q: How are levy increases controlled
A: Levies are set by the management association. Each holder is a member of the management association, and will have a vote concerning levies and levy increases.
Q: Can I purchase a life right with anyone other than a person I am married to?
1. A holder can acquire a housing interest with any one or more co-holders.
2. A holder does not need to be married to a co-holder or a co-occupant.
3. A holder who acquires a housing interest with a co-holder who is not his/her spouse or civil union partner, would
obviously be advised to conclude a formal agreement with the co-holder, to protect both of them.
Q: Do I have to pay any additional cost i.e. transfer duty?
A: A holder does not pay transfer duty or VAT to acquire a housing interest.