Proposed changes to the Retirement Villages Act have placed how we care for those in their golden years under the political microscope.
Associate Housing Minister Tama Potaka and Seniors Minister Casey Costello announced planned changes that look to clarify the responsibilities of retirement village and rest home operators and residents.
The new framework would allow former residents to apply for early access to funds in specific cases, require payment of interest if a unit remains unlicensed after six months, mandate repayment of funds within a year of a unit being vacated, and ensure weekly fees and deductions stop the moment a resident leaves.
“For too long, residents have faced uncertainty, especially when moving out and waiting for their money to be repaid,” Tama Potaka says.
“We’re fixing that. These changes put people first by setting clear expectations and making the whole system more transparent.”
The reforms set out to simplify legal documents and require operator transparency. An independent disputes scheme will also offer residents a straightforward, accessible path to resolving concerns.
A major focus is on lowering the stress that loved ones face when a resident leaves a village. Potaka says families deserve certainty during what is often a challenging time.
“These steps deliver that certainty and strengthen the rights of residents, while supporting the sector to grow and innovate for the future.”
The review of the Retirement Villages Act is part of the National–New Zealand First coalition agreement.
ACT Housing spokesman Cameron Luxton agrees with the proposed changes, which are set to be implemented mid-2026.
“More than 11,000 residents, would-be residents, former residents, and village operators have participated in this review, and have been waiting many months for its completion, so it’s good to finally see the next step in the process,” he says.
The reforms to the Retirement Villages Act 2003 follow public consultation and five years of sector reviews.
“Greater certainty”: Village Guide founder
The Government’s proposed changes will give residents greater certainty over their finances, the founder of an independent, impartial guide to retirement villages and rest homes in New Zealand says.
Village Guide Founder Paula Bishop says many residents and families will welcome the changes. “Putting a clear outer limit on capital repayments and stopping weekly fees on exit will make the financial side of village living more predictable for future residents,” Bishop says.
“These measures respond directly to long-standing concerns about people waiting lengthy periods for their money.”
On the other hand, Bishop is concerned that future village development and supply will slow down due to the new compulsory buyback and interest rules. She says the changes aren’t cost-free.
“The financial impact on villages of combining interest from six months with a mandatory 12-month buyback should not be underestimated.
“It will place significant new financial obligations on operators and mean they will need to carry larger capital reserves or borrow more. Those additional costs will ultimately flow through to pricing and development decisions.
“We already know demand for retirement units is outpacing supply, with an expected 11,000-unit shortfall by 2033 and a slowdown of consenting activity over the last year.”
She warns that slowing down the development of retirement villages could ripple through the aged-care sector. After all, most new villages follow a continuum-of-care model that pairs independent living with onsite higher-level care.
About two-thirds of New Zealand’s retirement villages have an aged-care facility, and roughly half of all aged-residential-care beds sit within village developments.
“Retirement villages are not just lifestyle communities; they are a core part of New Zealand’s aged care model.
“If development becomes harder or more expensive, the ripple effects will be felt in care bed capacity and in the wider health system.”
“Landmark moment”: Retirement Commissioner
After years of highlighting the need for clearer, fairer and more balanced rules across the sector, Retirement Commissioner Jane Wrightson says the Government’s move to modernise the Act and rebalance the rights of residents and operators is a significant step forward.
“The changes reflect the voices of residents, the commitment of operators, and years of collaborative work. We look forward to seeing a retirement village sector that continues to thrive, innovate, and put people first.
“Ultimately, these reforms are about ensuring dignity, fairness, and peace of mind for those choosing retirement village living.”
Calls for a full review of the Retirement Villages Act began after the Commission released a white paper in 2020, followed by further recommendations in 2021.
Opposition says 12 months is too long
Labour Party spokesperson for seniors, Ingrid Leary, says the decision to give retirement villages up to 12 months to repay departing residents is far too long, and seniors will pay the price.
“It shows how out of touch the Government is with the realities older New Zealanders face,” she says. “No one should be waiting a year to get their own money back. This is not just inconvenient; it causes real hardship for seniors and their families trying to move on with their lives.”
“People leave or move within villages at some of the most stressful moments of their lives – after losing a partner, moving into care, or managing major health changes. Forcing them to wait up to 12 months for their money only adds to that stress and strips them of the financial flexibility they need.
“Seniors deserve fairness, respect and certainty – not empty promises and year-long delays.”
Designing for dignity
Scott Lester, Executive Director of Senior Trust Retirement Village Income Generator (STIG), says there is a shift in mindset toward modern retirement.
“This generation of older New Zealanders is active, socially engaged, and design-aware. Retirement living has to evolve to meet those expectations.
“If you can remove the stigma of ageing by designing spaces that support people without defining them, that’s a win.”
He says that design should age with people, not against them, and points to international design lessons developers could adopt.
In Australia, new communities feature resort-style amenities and wellness spaces, while the United States is experimenting with art studios, rooftop gardens and flexible communal zones.
Sweden has gone further, embedding universal design principles into housing policy and everyday urban planning.
For New Zealand, Lester says the lessons lie in designing environments that quietly support independence. That means incorporating accessible features from the outset, so level-entry showers, wider doorways and discreet handrails, as examples, all without making mobility the defining feature.
Light, airflow and nature are becoming central to village layouts, replacing the clinical feel of older designs with warmer, more open spaces that encourage wellbeing.
Shared areas such as libraries, cafés and hobby rooms are designed to spark genuine connection rather than programmed activity.
