Land lease communities are also known as residential parks, manufactured home estates and over-55s lifestyle communities.

The name ‘land lease’ means precisely that – you buy a dwelling (usually a relocatable style cottage) and then lease the land that it sits on.

Land lease arrangements can be ideal as a downsizing housing and lifestyle option. Here are six ways that you can use moving into a land lease to minimse your spending and maximise your lifestyle.

1. No stamp duty

If you’ve ever bought property, you’ll know that stamp duty can be a make or break to your budget.

The good news is that, when moving into a land lease community, you won’t have to even think about stamp duty. This makes sense, because you are taking out a long-term lease on the land instead of buying it.

This can save you significant coin. Stamp duty varies between states and territories but on an average $500,000 property can range between $13,000 and $25,000.

2. No council rates

In a land lease arrangement, the council rates (and, usually, water rates) are paid by the community as a whole.

Of course, you contribute to these costs through your weekly lease payments. But this means there is at least one less bill to hit your letterbox, making it easier for you to plan your budget and track your finances.

3. Low entry fees and no exit fees

The cost of buying your dwelling within a land lease community varies hugely depending on the geographic area, the size and quality of the home, and levels of demand.

However, because you are only buying the house rather than the land, the great news is that the cost is usually significantly less than a regular home in the same postcode.

This saving can allow you to enter the property market (if you’ve previously rented) or maximise equity released from selling your previous home (if you’re a home owner already).

And, because you own the dwelling, any rise in price over that time (due to overall property price rises, improvements you’ve made, or increased demand) are yours to benefit from.

In addition, many land lease community operators don’t charge deferred management (also known as exit) fees, although some do.

4. Rent assistance

Government rent assistance will only apply if you receive a benefit such as the age pension, JobSeeker payment, carer payment or disability support pension.

If you do, you will likely be eligible when you move to a land lease community, because your weekly lease payment is considered rent.

You don't even need to do any paperwork to apply! Simply update Centrelink (now under the umbrella of Services Australia) about your circumstances once you move and rent assistance will be automatically added to your other government payment.

5. Lower maintenance and renovation costs

A major incentive for many people when downsizing is to reduce the time and effort that it takes to maintain a larger house and garden. 

Downsizing also reduces costs. Just think about how much you spend on your garden and home maintenance, whether you are a do-it-yourself person or pay others to help you.

With a smaller property also comes smaller utilities bills. And, because almost all land lease communities are located on flat, accessible land, there is less chance that you’ll have to undertake expensive renovations in order to stay living in your home as you age. 

6. Reduced upfront home costs through shared equity

National land lease community operator Hampshire Villages offers a shared equity arrangement, where the home owner can pay as little as 65 per cent of the overall home cost, with Hampshire retaining ownership of the other 35 per cent. 

This arrangement has the potential to reduce purchase costs by up to $150,000.

Some final words from Downsizing CEO, Amanda Graham

“Land lease communities are increasingly attractive to downsizers, offering both affordability, community and lifestyle benefits. There are significant financial benefits that come with the idea of owning your house at an accessible price point, while long-term leasing the land on which it sits. Many of these communities are located in sensational prime coastal locations which may otherwise be unaffordable.”

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