Own your retirement: Why in SA Sectional-Title still outshines ‘Life Rights’

by | Mar 28, 2023 | March 2023 KZN | 0 comments

Retirement is full of decisions. At a time of life when ease, health and wellbeing should be of utmost importance, retirees are faced with the hefty decision of where to live their mature years.
Investing in a sectional-title home gives buyers the opportunity to stay on the property ladder and build equity. Whereas purchasing a ‘life right’ enables a retiree to buy a home for the remainder of their life without being responsible for its upkeep. The ‘life rights’ practice is widely-recognised abroad and it’s a popular avenue for long-term tenancy in the later years of people’s lives in the USA, Australia and New Zealand. In South Africa, however, it’s still not a preferred method with many questions around the benefits to going this route, of which the biggest uncertainty lies in what happens with the purchaser’s deceased estate once they have passed on.

“Buying somewhere to live via a life rights agreement is just as the name suggests; the buyer purchases the ‘right’ to occupy a home within a purpose-built retirement development for as long as they live. But securing life rights doesn’t give retirees the financial legacy that most people we have dealt with desire,” says Director of Sales and Marketing at Devmco Realty, Pamela Naidu, who is integrally involved in the Capri Village development aimed at people over 50 years of age.

Pamela Naidu

She continues, “We’ve seen with our Capri Village that’s gone into Phase 2, that many retirees dream of fulfilling hobbies, spending more time with loved ones and simply taking the time to enjoy life to its fullest. Of course, where you choose to live is a big part of that. When considering a property purchase in your later years, you need to think first and foremost about what is best suited to your lifestyle aspirations and retirement plans. For couples or individuals who want to live in a community-centric development, many consider buying either a sectional-title residence or a life rights in a retirement home. Both options will most likely come with similar amenities, ranging from healthcare services to sporting facilities and social clubs. The biggest difference – and perhaps the most important – is the financial implications of choosing a sectional-title purchase over a life rights.”

CAPRI VILLAGE OFFERS:

  • Clubhouse
  • Bowling green
  • Bocce Ball
  • Braai pods
  • Indoor pool
  • 24-hour security
  • Library
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THE BENEFITS OF BUYING LIFE RIGTS

Buying a life rights option does come with its benefits. Typically, life rights are more cost-effective than sectional-title properties as many developers fix annual rate and levy hikes, and conveyancing costs and transfer duties aren’t applicable. However, none of the buyer’s capital outlay goes towards investing in fixed property, nor is a life rights option considered an asset so it will not appreciate in value. Contractually, once the buyer passes on, the developer takes ownership of the property once again and someone else will thereafter occupy the property. Only after its subsequent sale, which is oftentimes an onerous event, will the deceased estate receive a small portion of the initial investment.

“Financial security is earned through years and years of hard work. It is a privilege to build equity over the course of your life and to be in the position to pass on a tangible asset to loved ones and dependents, especially one that is likely to grow in value due to location, desirability or market demand. With a life right, none of this is possible. We’re seeing many mature buyers investing in a lifelong home at Capri Village, even before they’re ready to live in it themselves, and renting it until they decide to move in. This is another advantage of a sectional-title property or free hold ownership, and it’s just one example of the flexibility and financial independence it allows. For this reason and more, the demand around Capri Village has surpassed all our expectations, showing how healthy and vibrant the over 50s market is. It offers buyers a lifestyle that stands out from other retirement options, all based on thorough research and a perceptive understanding of what mature adults want.”

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CAPRI VILLAGE OFFER BOTH OWNERSHIP

Capri Village offers both sectional title ownership and freehold ownership to accommodate the needs of buyers. With sectional title ownership, purchasers have the flexibility to rent out the property and benefit from capital appreciation, enabling mature buyers to leave a legacy for their loved ones. On the other hand, freehold ownership allows purchasers to custom design their dream home according to their preferences and create a forever home.

Achieving 40% in sales within the first few days of launch, it’s evident that Capri Village has answered the market’s pent up demand for a product catering to the key needs of over 50s. It offers residents independent living in step-free, pet-friendly homes with private gardens, as well as discreet, professional medical services when needed, state-of-the-art security and incredible estate facilities within Salta Sibaya on the North Coast of KwaZulu-Natal.

Stands and 1-, 2- and 3-bedroom residences at Capri Village are currently available with starting prices from R1 295 000 for land from R2 705 000 for homes.

Read more about Capri Village here

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