Guides & Insights

What is a Land Lease Community?

A land lease community is a residential development where you own your home outright but lease the land it sits on from the community operator — paying an ongoing site fee rather than purchasing the land itself.

If you've been researching your retirement options, you've probably come across the term "land lease community." It's one of the fastest-growing forms of over-55 living in Australia — and once people understand how it works, it's easy to see why.

How it works

In a land lease arrangement, you own your home outright — but you lease the land it sits on from the community operator. Instead of paying a large sum upfront for both home and land (as you would in a traditional property purchase), you pay an ongoing site fee — typically fortnightly or monthly — to occupy your plot within the community.

At Zest Living in Yarrawonga, Victoria, this means you purchase your home, move in, and pay a site fee that covers your land lease and access to all community facilities — the pool, gym, clubhouse, lawn bowls, and everything else.

What you don't pay

This is where land lease becomes especially attractive for people downsizing from a family home:

• No stamp duty — because you're purchasing a home, not land
• No exit fees — you keep the full proceeds when you sell
• No deferred management fees — a common (and expensive) feature of traditional retirement villages
• Any capital gain is yours — your home can appreciate in value just like any other property

What does the site fee cover?

At Zest Living, the site fee covers your land lease and full access to all community facilities. It does not cover your home's council rates, home insurance, or utilities — those remain your responsibility, as they would in any home you own.

Many residents are also eligible for Commonwealth Rent Assistance, as site fees are treated similarly to rent under the Social Security Act. This can meaningfully offset the ongoing cost. Check eligibility at servicesaustralia.gov.au or speak with a financial adviser.

Who is land lease suitable for?

Land lease communities are designed for Australians aged 55 and over. They work particularly well for people who:

• Want to downsize and release equity from their family home
• Value community living — shared facilities, activities, like-minded neighbours
• Want a new, low-maintenance home without the cost and complexity of a traditional purchase
• Prefer to retain capital rather than lock it into land

Land lease vs. retirement village: what's the difference?

The key distinction is ownership and fees. In a traditional retirement village, you often pay an Ingoing Contribution (a large upfront sum), then a Deferred Management Fee of 20–35% of the entry price when you leave. In a land lease community, there is no DMF — you own the home, sell it freely, and keep everything.

The Retirement Villages Act governs traditional villages; land lease communities in Victoria are governed by the Residential Tenancies Act 1997, which provides clear protections for residents including regulated notice periods and rights to sell.

If you'd like to understand how Zest Living's land lease arrangement works in detail — including the site fee, what's included, and how it compares to your current situation — our team is happy to walk you through it.