When the Retirement Villages Amendment Act 2025 comes into effect on 1 May 2026, it will mark a significant shift in how retirement village assets are governed, funded and disclosed in Victoria.
While the reforms span consumer protections, governance and contracting, their most material implications for operators sit squarely with capital maintenance and replacement.
For retirement living providers, many of whom also operate aged care assets, the new framework raises expectations around transparency, asset condition knowledge and long term capital planning.
With less than a year until commencement, the question for operators is no longer what is changing, but how prepared they are.
A firmer line around capital responsibility
The Amendment Act removes longstanding ambiguity about who pays for major capital works.
Under the new framework, operators are explicitly and financially responsible for capital replacement of assets they control. These costs can no longer be passed on through recurrent charges, nor indirectly recovered via depreciation‑style allowances in village operating budgets.
In practical terms:
- Capital items must be replaced using operator funds.
- Annual budgets may no longer include allowances for replacing operator-responsible assets.
- Operators must carry out maintenance or replacement within a “reasonable time” once aware of the need.
Residents also take on a defined obligation to notify operators if they become aware of capital issues within their premises. Together, these provisions place a stronger emphasis on clear definitions, timely action and sound asset knowledge.
For operators managing ageing infrastructure or mixed‑generation buildings, this change significantly elevates capital planning risk and visibility.
Rising expectations around transparency
The Victorian reforms move the state closer to the retirement village frameworks already in place in New South Wales and Queensland, where transparency of major capital assets and future funding obligations is central.
This shift demands a move away from high‑level assumptions toward evidence‑based asset planning. Operators will increasingly need to demonstrate that their views on asset condition, remaining life and replacement timing are grounded in inspection, analysis and documented logic, not legacy registers or generic lifecycle curves.
This transparency will be scrutinised not only by regulators, but also by residents, advisors and boards seeking confidence that capital obligations are being responsibly managed.
Capital Maintenance Plans move centre stage
A cornerstone of the reforms is the introduction of a mandatory 10‑year Capital Maintenance Plan (CMP) for each village.
While many operators already prepare forward capital plans, the CMP is materially different. It is a formal, legislated requirement that must stand up to regulatory and stakeholder scrutiny.
A compliant and credible CMP should include:
- Clear identification of operator-responsible capital items, aligned to the new framework
- Current asset condition assessments, informed by physical inspection
- Documented prioritisation logic, linking condition, compliance and risk and resident impact
- Realistic timing and staging of works, reflecting operational constraints
- Transparent forward cost forecasts to support sustainable budgeting
Importantly, the CMP is not just a compliance artefact. It becomes a key governance and communication tool, supporting more informed discussions with residents and decision makers about future capital investment.
Contract timing increases urgency
The timing of the reforms adds further complexity.
All Residence and Management Contracts entered into on or after 1 May 2026 must comply with the amended legislation and use the newly prescribed standard forms. This creates a clear cut over date for aligning asset responsibilities, disclosures and capital strategies.
Operators that delay updating their capital planning frameworks risk finding themselves non compliant by default, through contracts that reference obligations without adequate asset data or funding strategies to support them.
Early alignment is particularly important for organisations with multiple villages or staggered contract renewals.
Opportunities for multi-state operators
While the reforms introduce new obligations, they also present opportunities, especially for operators with portfolios spanning Victoria, New South Wales and Queensland.
The closer legislative alignment across these states creates scope for more consistent, portfolio wide asset management and capital planning approaches, with targeted adjustments for local nuances.
This consistency can deliver tangible benefits, including reduced duplication, clearer portfolio level risk visibility and improved capital decision making at board level.
For providers operating across aged care and retirement living, a unified approach to asset condition assessment and long term capital planning can strengthen both compliance outcomes and financial sustainability.
Beyond compliance: building confidence and trust
Although compliance is the immediate driver, the broader value of rigorous Capital Maintenance Planning should not be underestimated.
A robust CMP supports greater certainty around long term capital exposure, improved financial resilience by identifying obligations early, operational confidence for village and facilities teams, and enhanced resident trust underpinned by transparency and forward planning.
As governance expectations continue to rise across the sector, the ability to demonstrate proactive asset stewardship will increasingly differentiate operators.
Acting before May 2026
Developing a compliant, evidence based Capital Maintenance Plan takes time, particularly where asset data is incomplete or outdated.
With the 1 May 2026 commencement date approaching, operators that act early will be better positioned to manage risk, avoid last minute remediation and embed stronger long term asset strategies.
In many respects, the reforms are less about adding burden and more about lifting clarity. Those who embrace that clarity now will be best placed to operate with confidence in Victoria’s evolving retirement living landscape.
