What is a Land Lease Community?

A Land Lease Community (LLC) is typically a secure, gated community where the residents buy and own their home but lease the land it sits on from an operator. In other words, you own the building, but you pay a regular fee to use the land, as well as an array of high-quality shared facilities which are typically offered within such communities.

This model primarily caters to over-50s and is becoming increasingly popular in Australia, especially with empty-nesters, right-sizers and retirees looking for a more affordable and low-maintenance lifestyle.

Rising trend of over-65s renting

If you are considering a land lease community, it may help to know that renting in later life is becoming more common. Urbis has identified a growing group of older Australians sometimes described as “silver renters”. By 2036, the number of Australians aged 65 and over is expected to reach around 6.5 million, and Urbis forecasts more than 100,000 additional renter households aged 65-plus by that time.

This matters because it shows that more people are looking for secure, manageable and flexible housing options as they age. Urbis reports that 18 per cent of Australians aged 65 and over are now renting, compared with 16 per cent in 2011. This shift suggests that renting or lease-based arrangements are no longer limited to younger households or short-term stages of life.

How is it different from other housing options?

Traditional home ownership: You buy both the house and the land. This usually requires a larger upfront costs and ongoing maintenance of both.

Retirement Villages: Retirement Villages often offer a leasehold or licence agreement structure and have higher on-site assistance and care support for residents.

Caravan Parks: These are typically aimed at short stay visitors, with some parks catering to permanent residents through long stay tenancies to live in a caravan, mobile home or park home. The facilities cater for broad age groups  to suit the tourist market (eg. Bouncing pillows).

Land Lease Communities: You own your home outright and retain capital gains on its sale but you pay a rent to lease the land and enjoy the use of high-quality, purposely designed shared facilities. It caters for an independent and active living lifestyle so there are no care facilities or meal services like in retirement villages.

Put simply, land lease living offers a middle ground, more control and ownership than a retirement village, but lower entry costs and more of a community feel than traditional home ownership.

How Land Lease Communities Work

Understanding how these communities operate is key to deciding if they are right for you.

Buying the home vs leasing the land

When you enter a land lease community you purchase the home itself, just like buying a typical house. However, instead of buying the land, you enter into a site lease agreement with the community operator. This arrangement significantly lowers the upfront costs, as land is often the most expensive part of real estate. As the land is not being purchased, you also will not pay stamp duty.

In most land lease communities, on re-sale of the home, residents receive 100% of capital gains as a cash profit (subject to any agreed permitted fees charged by the operator, as set out in the site agreement).

When you enter into a site lease agreement, there are important consumer protections designed to give you certainty, transparency, and security. Specifically, the agreement must clearly set out your rights, your obligations, and all fees upfront, so there are no hidden surprises.

In Western Australia, laws help ensure you have ongoing rights to live in your home, limits around how and when site fees can be increased, and access to fair dispute resolution processes if issues arise. You also cannot be asked to leave without proper legal grounds. These protections are in place to support all buyers, especially more vulnerable homeowners, so you can feel confident about your living arrangements and make informed decisions.

Home financing considerations

As buyers are only purchasing the house, not the land, currently, most big banks don’t provide finance for a mortgage. This means residents usually need to pay cash to buy their home outright (often by selling their existing home) or explore alternative lending options such as personal or chattel loans, which typically carry higher interest rates, shorter loan terms, and lower loan-to-value ratios.

Weekly or fortnightly site fees

In exchange for using the land and shared facilities, residents pay a site fee. This is usually charged weekly or fortnightly and is one of the main ongoing costs of living in a land lease community.

Residents are often eligible for Commonwealth Rent Assistance, which is a non-taxable allowance providing financial support for these ongoing lease fees.

The fees paid to the community operator generally cover the use of the land, upkeep of common areas, and operation of and access to shared facilities such as gardens, clubhouses, pools, gyms, etc. They may also contribute to services like site management, security, rubbish collection or general maintenance, depending on the community.

The exact amount varies between communities, so it’s important to check what’s included, how often the fee is reviewed, and whether there are any extra charges for certain services or facilities.

In Western Australia, for site-only agreements like most land lease communities, site fees generally cannot be increased more than once every 12 months, and the operator must give at least 60 days’ written notice before an increase takes effect. For agreements entered into from 31 January 2022, the agreement must also clearly state how the increase will be worked out (for example, by CPI, a fixed percentage, or a fixed dollar amount) and market-based review clauses are generally not allowed in newer agreements.

It’s important to read the site agreement carefully to help you understand any upfront, ongoing and exit fees and charges that may apply, so you know the total costs before you commit.

Other fees and charges

Residents still need to pay for their utilities usage and home/contents insurance.

As mentioned earlier, typically residents will receive 100% of the capital gains on re-sale of the home subject to any agreed permitted fees charged by the operator, as set out in the site agreement. To improve affordability, some operators may have a lower home purchase price and a Deferred Rental Fee (DRF), and some operators offer a choice between a higher site rental rate or a lower site rental rate coupled with a deferred portion. The agreement will clearly show if a DRF will or will not apply and the basis on which this is to be completed.

Who manages the community?

A developer or operator owns the land and manages the community. Their responsibilities usually include maintaining shared facilities, managing landscaping and infrastructure, setting out community rules, and supporting resident activities and engagement.

In Western Australia, under the Residential Parks (Long-Stay Tenants) Act 2006 the operator of a land lease community must establish and maintain a Park Liaison Committee. The committee’s role is to provide a regular way for residents and the operator to discuss matters affecting the community, and residents must be able to choose their own representatives without the operator interfering. As a practical matter, the committee may also help share information with residents, raise common concerns with the operator, discuss proposed changes to park rules or services, and support open and respectful communication about day-to-day issues such as shared facilities, maintenance and community rules.

A well-managed community can greatly enhance your living experience.

Land Lease Community Features

One of the biggest attractions of land lease communities is the lifestyle they offer.

Shared amenities

Most communities include a range of shared facilities, such as clubhouses or community centres, swimming pools and gyms, lawn bowls or pickle ball courts, BBQ areas, outdoor entertaining spaces, and walking paths and landscaped gardens.

These amenities are designed to create a relaxed, enjoyable and sociable environment without the need for personal upkeep.

Security and community management

Many land lease communities include security and management arrangements to support a safe, orderly and well-maintained environment such as:

These arrangements vary between communities, so check the site agreement, community rules and disclosure material for the community you’re interested in before buying.

Such arrangements can provide peace of mind, particularly for retirees, people who live alone or residents who travel often. However, residents should still understand their legal rights and obligations, including how rules are enforced, who is responsible for repairs, and what happens if standards are not met.

Good management should balance independence with the practical needs of close community living through clear communication, transparent decisions and timely responses to issues.

Lifestyle and social aspects

Living in a land lease community can offer a close-knit neighbourhood while still allowing residents to choose how involved they want to be. Some value regular social interaction and belonging; others prefer privacy with familiar people and support nearby.

Activities may include:

This can reduce isolation, support active ageing and foster social connection. It can also make day-to-day life easier by giving neighbours opportunities to share information and look out for one another.

Community living may not suit everyone. Prospective residents should consider whether the rules, pace, facilities and social expectations of a particular land lease community match their preferences, and should visit the community, speak with residents and review the rules before signing up to join the community.

In summary

Benefits of Land Lease living…

Land Lease Communities are best suited to…

Over 50s who are:

Things to be aware of and understand…