PropertyScope

Downsizing

Thinking about downsizing? Start here.

Retirement village contracts are genuinely hard to compare — deferred management fees, who keeps the capital gain, how long your money takes to come back. This page explains it plainly so you (or a parent) can weigh village, downsize, or staywith clear eyes. It’s information to help you ask good questions — not financial advice.

The bits people find confusing

You're buying a licence, not the home
Most village contracts are an Occupation Right Agreement — you buy the right to live there, not the property itself. That's why the money side works differently to owning.
The Deferred Management Fee (DMF)
A slice of your entry price the operator keeps when you leave — commonly capped around 30%, usually accruing over the first few years. On a $700,000 unit a 30% DMF is $210,000.
Who keeps the capital gain
In most NZ villages you don't share in any rise in value — the operator keeps it. Over years in a rising market that can be significant; in a flat market, much less.
Getting your money back
Historically repayment could take many months after you leave, sometimes over a year — which is exactly what the December 2025 reform is trying to fix.

What could a village cost your capital?

A rough illustration — change the numbers to your own situation.

How long in the village?

Deferred management fee deducted when you leave (30% of entry)$210,000
Capital gain the operator keeps, at 3%/yr over 10 years$240,741

In most NZ villages you don't share in this. In a flat market it's much smaller — set growth to 0 to see.

Weekly fees over 10 years (these pay for services)$93,600

Estimated impact on your capital over 10 years

$450,741

(the fee deducted, plus the gain you wouldn’t share in — not counting weekly fees)

This is a rough illustration to help you ask good questions — not advice, and not specific to any village. Every contract differs. Under the Retirement Villages Act 2003 you must get independent legal advice before signing, and you get a 15-working-day cooling-off period. Use that lawyer — it's your protection, and it's the law.

What the December 2025 reform changes

  • Announced 4 December 2025: your capital to be repaid within 12 months of leaving, with interest accruing from 6 months.
  • Weekly fees and fixed deductions to stop when you move out.
  • Residents not to be liable for capital losses unless they share in capital gains.
  • A new, operator-funded independent disputes scheme.
  • Important: the repayment changes are proposed to apply to agreements signed after the Bill passes (expected mid-2026). Check what actually applies to any specific contract.

Free: The Auckland Downsizer's Guide 2026

Village vs downsize vs stay, the money explained, a village-visit checklist, and how to sell the family home well — sent to your inbox.

Your email is collected by Amit Sharma (Licensed Salesperson (REAA 2008)) to send you this, and — only if you tick the box — to follow up. We do not sell, trade or share your details. Reply any time to access, correct or delete your information.

Talk it through — no pressure

Whether it’s for you or a parent, Amit Sharma is happy to have an honest, no-obligation chat about the options — including what the family home would realistically sell for.

Book a free chat

Before you sign anything

Under the Retirement Villages Act 2003 you must get independent legal advice before signing, and you get a 15-working-day cooling-off period. Use that lawyer — it's your protection, and it's the law.

For independent, non-commercial money guidance, see sorted.org.nz. Everything here is general information current as at July 2026 — not financial, legal or tax advice.