What Will Downsizing Really Cost in 2026?

For decades, Australians have been told that downsizing is the key to a simpler, more secure retirement. And for many, it is. But as costs rise, fee models evolve, and new government thresholds reshape entitlements, one question matters more than ever: what will downsizing really cost in 2026?

The answer used to involve complex spreadsheets and lengthy legal documents. Now, thanks to TrueCost, powered by VillageGuru and exclusive to Downsizing.com.au, buyers can see the full financial picture — entry, ongoing, and exit fees — before they commit.

“TrueCost takes one of life’s most complex financial decisions and makes it clear, personalised, and transparent.”

The cost layers most people miss

Every retirement village contract is unique. Beyond the property price, there are four key financial layers that determine your real cost of living:

1. Entry payment (ingoing contribution) — your upfront cost to move in.

2. Ongoing fees — regular payments that cover maintenance, facilities, and staff.

3. Deferred Management Fee (DMF) — a percentage deducted when you leave, often between 25% and 35% over 10 years.

4. Exit and resale costs — including refurbishment or reinstatement fees.

While these elements aren’t new, their complexity has often left buyers guessing what they’ll actually receive back when they move out or pass away.

TrueCost changes that by modelling your personal scenario based on your entry payment, village contract type, and expected length of stay. The result is a clear dollar figure showing your projected net position — the money you’ll keep.

2025: a year of financial shifts

This year brings several important updates that will impact downsizers:

• Age Pension thresholds have increased. The “extra allowable amount” under the assets test is now $258,000 (as of 1 July 2025). This affects whether you’re classified as a homeowner or non-homeowner for pension purposes. Assets test for Age Pension
  

• Inflation-linked increases in maintenance and village fees are appearing in more contracts.

• Regulatory scrutiny is rising, with operators expected to provide more transparent fee information to residents. Code of Conduct | Retirement Living
  

For Planners and Practical Simplifiers, these changes make financial clarity more critical than ever.

“Costs are changing, but confusion doesn’t have to be part of the equation.”

Comparing the real costs

Imagine you’re considering two villages — both priced at $550,000. Village A charges a 30% DMF over 10 years with a six-month buyback period. Village B has a 25% DMF but requires you to pay refurbishment costs before resale.

At first glance, they seem similar. But a TrueCost report might show that Village B’s slower resale time and extra charges reduce your net return by $38,000.

This type of insight helps retirees like Cautious Planners and Supportive Children avoid nasty surprises and negotiate confidently. 

The TrueCost advantage

Unlike brochures or sales pitches, TrueCost isn’t designed to sell—it’s designed to inform. It calculates:

• Total cost of living based on contract type

• Estimated exit value and equity position

• Pension and Rent Assistance implications

• Timeframes for resale and buyback

It’s a level of clarity that lets buyers make apples-to-apples comparisons, not just between villages, but between entirely different living models.

Personas in action

• Planners use TrueCost to stress-test every scenario before signing.

• Future Thinkers use it early to see how a future move might impact their finances or pension.

• Cautious Planners appreciate that it translates jargon into real numbers.

• Supportive Children can step into discussions confidently, armed with data instead of guesswork.

Whatever your stage, TrueCost empowers better conversations — not just with agents and lawyers, but within families.

The bottom line

Downsizing isn’t just a property decision — it’s a financial strategy. With living costs and asset rules evolving, transparency has never been more important.

TrueCost makes that transparency accessible, giving Australians a clear view of what lies ahead before they take the leap.

So before you sign anything, ask one question: “What does my TrueCost look like?”
Then head to Downsizing.com.au to find out.

Downsizing.com.au presents Our “TrueCost of Downsizing” series — helping Australians move with clarity and confidence.

1. The New Way to Downsize with Confidence
2. Top 5 Downsizing Tips — Now with TrueCost Insights
3. What Will Downsizing Really Cost in 2025?
4. The Hidden Costs You Can Now See with TrueCost