Wednesday, 13 June 2018

Capital Gains Essential For Retirement Village Residents

Access to capital gains is essential to retirement village residents by providing some protection from a slide in their capital value over their occupancy.

A flat or falling property market will pose financial risks for many residents over their period of occupancy.

Retirement village contracts contain various models when it comes to who gets the capital gain. Some contracts grant the resident 100% of the gain, some have a sharing clause such as 50/50 whilst in some contracts the resident gets no share of any capital gain.

Prospective residents need to be aware that contracts that grant capital gains to the residents generally have a clause where the resident is also responsible for capital losses to the same ration of gains.

The following table charts the potential differing impacts on a resident from varying capital gain rates achieved over their period of occupancy. The industry average occupancy period in a retirement village is 7 years.


at
Labels: ,

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)

Function of Government

The role of government is to create an environment for commerce to function whilst at the same time protecting retirees and particularly vulnerable retirees from both financial and emotional harm emanating from that function.

The Victorian Retirement Villages Act 1986 provides the environment for commerce to function but fails to fully protect retirees from financial and emotional harm as a result of it.

The Victorian legislative definition of a retirement village in demanding the payment of an 'in-going' amount without the transfer of property ownership is a major contributor to that financial and emotional harm suffered by retirees.


retvill.net

Popular Posts

Labels