Aged Care Facility and Retirement Village Finance for Operators in Australia
Accommodation Finance
Acquisition · Valuation · Registration · Liquidity · Exit entitlements
This is the operator and provider side of Australian care asset finance: what can be funded, how lenders value and secure the asset, what happens to refundable deposits when a home changes hands, how registration and settlement interact, what exit entitlement liabilities do to retirement village liquidity, and what to do when a valuation, approval timetable or bank decision changes the funding plan.
Quick Answer
Australian lenders size aged care facility finance against specialist value and sustainable operating cash flow, not the property alone. For residential aged care, AN-ACC funded revenue, occupancy, care-minute staffing, Star Ratings, refundable deposit liabilities, prudential liquidity and registration all matter; for retirement villages, lenders also examine deferred management fee economics, unsold units, resident exit entitlements and the development or resale pipeline. Mainstream provider-allocated residential places from the former allocation system ceased on 1 November 2025, while the post-2025 accommodation rules and the transition toward payment on services delivered from 1 July 2027 change the timing of cash a lender needs to model.
This guide covers care asset finance for operators and providers. It is not about a family funding a resident's refundable accommodation deposit.
Scroll the table sideways to see every column.
| If you are | The question you are really asking | Start with |
|---|---|---|
| Buying, refinancing, developing or expanding a care asset | What type of facility fits the use of funds, and what will drive lender appetite? | what an operator can finance |
| A provider buying another aged care home | How much cash do I need at settlement, and what happens to resident deposit balances? | who takes over the refundable deposit balances |
| An investor buying the building to lease to an operator | Will a lender treat this as property investment or an operating business exposure? | leasing the building to an operator |
| A buyer negotiating an acquisition contract | Which conditions and third party approvals can make the settlement date unrealistic? | what to check before signing |
| A retirement village operator with vacated, unsold units | When can cash be required before the next resident pays in? | funding exit entitlements before resale |
| An operator whose valuation is low or bank has declined or reduced the facility | Is the constraint value, cash flow, regulation, liabilities, structure or lender appetite? | what to do after a valuation or credit problem |
| A provider planning a refurbishment or expansion | Can refundable deposits fund it, and when is separate external finance still needed? | what the deposit pool can be used for |
| Anyone asking how much can be borrowed | How is a care asset valued, and what limits the loan? | how a care asset is valued |
What can an aged care or retirement village operator finance?
An operator can seek finance for an acquisition, refinance, freehold purchase, propco and opco structure, refurbishment, expansion, new development, equipment or a short-term settlement or liquidity gap. The facility is not chosen from the industry label alone. The lender first asks what the money is for, what asset and entity provide security, how the debt is repaid and which regulated liabilities must be met before free cash is available for debt service.
That is why two borrowers who both search for "aged care finance" can need completely different structures. A stabilised operating home may be underwritten as a going concern. A landlord buying only the freehold is underwritten around the lease and operator covenant. A new build introduces development risk. A short settlement gap may require a different lender from the eventual long-term facility. A retirement village with a large schedule of vacated units can be property-rich while still facing a near-term liquidity problem.
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| Use of funds | Structure to investigate | What usually drives the credit decision |
|---|---|---|
| Buy an operating aged care home | Going concern acquisition facility, sometimes with separate property and operating entities | Specialist valuation, sustainable earnings, occupancy, registration, compliance, refundable deposit liabilities and buyer experience |
| Buy only the land and buildings | Commercial property or propco facility | Property value, lease terms, operator covenant, registration risk and replacement-operator pathway |
| Refinance existing debt | Senior refinance or restructure | Existing debt, cash flow, covenants, valuation, regulatory position and why the current facility is changing |
| Refurbish or expand | Property, capex or development facility, with refundable deposits used only where the statutory permitted-use rules allow | Cost plan, approvals, bed variation where relevant, valuation impact, liquidity and ability to trade through works |
| Build a new facility or village | Development and construction finance | Site, planning and building approvals, construction cost, equity, pre-opening plan, operator capability and completion value |
| Bridge a settlement or timing gap | Short-term or bridging finance where appropriate | Security value, a credible exit strategy, third party approval timing and whether the long-term facility can actually take out the bridge |
| Meet retirement village exit liabilities | Liquidity or structured working-capital facility where appropriate | Exit-entitlement schedule, unsold stock, residence contracts, earliest statutory cash dates and realistic resale assumptions |
Do not start with a headline LVR or interest rate. There is no single aged care or retirement village lending ratio that applies across these structures, and a lender can reduce a facility even where the real estate value is strong if the operating cash flow, registration position or resident liabilities do not support the proposed debt. The sections below show which constraint applies to which asset.
The table above is a finance-structure map, not a statement that any lender will approve a particular purpose, amount, LVR, rate or timeframe.What does a lender take security over now that mainstream provider-allocated places have ceased?
A lender financing a mainstream Australian residential aged care home takes security over the land where available, the operating entity and its contracts, and personal property such as equipment. It does not take security over a transferable mainstream bed licence or provider-allocated place. The former ACAR and bed-ready provider allocations ceased on 1 November 2025, while specialised programs such as Multi-Purpose Services and Transition Care can continue to use allocated places.
The Department of Health, Disability and Ageing publishes that residential care places are now assigned directly to older people approved for government-funded residential aged care, and that providers no longer need an allocation of mainstream places to deliver those services. The same guidance expressly preserves allocated places for specialised aged care programs. That distinction matters in due diligence: "places ceased" is correct for the former mainstream provider-allocation system, but it is too broad if applied to every Commonwealth aged care program.
For mainstream residential care, earning capacity now depends on the approved home, its total approved beds and the registered provider that operates it. The Department says the Commission approves the total number of residential beds at each home and a provider must vary its registration when increasing the total number. A lender therefore underwrites an operating permission and compliance position that can change during a facility term rather than treating a former bed allocation as a separate transferable asset.
The second question is whether the lender is funding a residential aged care home or a retirement village. The two are often marketed together but they hold different resident money, answer to different regulatory regimes and repay residents on different triggers.
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| What a lender asks | Residential aged care home | Retirement village |
|---|---|---|
| Who regulates the operator | Commonwealth. The Aged Care Quality and Safety Commission registers the provider and approves the residential care home. | State and territory legislation, regulators and tribunals. |
| What the resident pays in | A refundable accommodation deposit or other accommodation payment under the Commonwealth aged care framework. | An ingoing or entry contribution under a residence contract, commonly with a deferred management or exit fee. |
| Who holds that money | The registered provider holds refundable deposits as liabilities that must be refunded on statutory triggers. | The operator holds liabilities that may become exit entitlements under the contract and relevant state or territory law. |
| What it can be spent on | Refundable deposits may be used only for permitted purposes under section 310 of the Aged Care Act 2024 and the Aged Care Rules 2025. | Governed by the residence contract and state or territory retirement village law, not by section 310 merely because the asset is a retirement village. |
| What triggers repayment | Statutory triggers under the Aged Care Act and Rules, including when care ends and on death. | Permanent departure and the applicable contract or statutory payment mechanism, which differs materially by jurisdiction and tenure. |
| Who carries insolvency risk | The Commonwealth Accommodation Payment Guarantee Scheme can protect eligible resident refundable deposits if a provider cannot refund them. | There is no equivalent Commonwealth aged care deposit guarantee simply because the asset is a retirement village. |
| What caps operating capacity | Approved beds at the home, building capacity, staffing, demand and the provider's registration and compliance position. | The village units, residence contracts, occupancy and the legal and commercial model applying to each tenure type. |
| What a lender can take security over | Land where owned, entity assets, contracts and personal property, subject to the law and transaction structure. Not resident refundable deposits as free equity. | Land where owned, entity assets and contracts, subject to resident rights, statutory charges and the tenure structure. |
A single acquisition can contain both columns. An operator buying a site with an aged care home and an attached village can be acquiring two regulatory regimes, two liability pools and two different resident cash cycles on one broader property exposure. Where the landowner and operator sit in different entities, the lender also has to decide which borrower owns the property, which borrower earns the operating cash flow and which guarantees or security connect them.
How is an aged care home or retirement village valued, and how much can an operator borrow?
An aged care home is valued for lending as a going concern: the land, the buildings and the operating business together, by a specialist valuer, not as an empty building. A retirement village is valued as the operator's interest, mainly the deferred management fees and any capital gain share expected as units turn over. There is no standard loan to value ratio for either, and a lender usually advances a lower proportion than it would against a plain commercial building.
The loan is sized twice, once against the valuation and once against the cash the business produces after its obligations to residents. For a residential care provider those obligations include the refundable deposit balances and the quarterly minimum liquidity amount covered further down, which is why two homes with similar valuations can support very different loans. Market evidence points the same way: a reported May 2026 sale of four leased south east Queensland homes came in at under $200,000 per bed, which the selling manager put at a 57 per cent discount to replacement cost, so a lender will not lend against what the building would cost to replace. The general reasoning is set out in why lenders lend less against specialised property.
Scroll the table sideways to see every column.
| What the valuer and lender look at | Aged care home | Retirement village |
|---|---|---|
| What is actually valued | The land, buildings and operating business as a going concern | The operator's interest: future deferred management fees, any capital gain share, and unsold stock |
| The income evidence | Occupancy history, the mix of residents paying by lump sum deposit or by daily payment, government funding income, and the retention amount a provider can keep from new refundable deposits from 1 November 2025 | Unit turnover, the resident age profile, resale history and how long vacated units sit unsold |
| The building | Room configuration, ensuites, building age, refurbishment needs, and building and fire compliance | Age and condition of the units and community facilities, and who carries capital maintenance under the contracts and state law |
| The regulatory position | Registration period and conditions, any notices or compliance action, the approved bed number and the Star Rating | Compliance with state retirement village law, and which contracts sit under recent state reforms |
| What reduces the lendable amount | Refundable deposit liabilities, the liquidity charge, compliance action and a weak Compliance rating | Exit entitlements owed, vacated units facing a statutory deadline, and contracts on low deferred management fee terms |
One item on that list is public. The Department of Health, Disability and Ageing publishes a Star Rating from 1 to 5 stars for every residential aged care home through the Find a provider tool on My Aged Care, built from four sub-categories: Residents' Experience, Compliance, Staffing and Quality Measures. A lender's credit team can look it up as easily as the buyer can, so check it, and the Compliance sub-rating in particular, before a valuer is instructed rather than after.
Sources read 21 September 2026: Department of Health, Disability and Ageing, Star Ratings for residential aged care homes, information for aged care providers and information for older people; StewartBrown, Aged Care Financial Performance Survey Sector Report, June 2025, on refundable deposit retention from 1 November 2025; The Weekly Source, four aged care homes sold for $90M in OpCo/PropCo deal, 19 May 2026. The valuation drivers in the table are practitioner judgement, indicative, based on care linked files Switchboard has placed as at September 2026. They are not a statement of any lender's policy or of any valuation outcome.How do AN-ACC funding, care minutes and Star Ratings affect aged care borrowing capacity?
They affect the sustainable earnings a lender is prepared to rely on, not just the compliance checklist. AN-ACC drives a major component of government care funding, occupancy and resident classifications drive the amount earned, care-minute and 24/7 registered-nurse responsibilities affect the staffing cost base, and Star Ratings make staffing and compliance performance visible to a lender before it approves the debt.
| Driver | Published Australian position | What the operator should model | Why it can change debt capacity |
|---|---|---|---|
| AN-ACC funding | Government residential-care funding uses AN-ACC classifications, National Weighted Activity Units and an AN-ACC price that is updated over time. | Occupied places, resident classifications, subsidies and supplements, plus sensitivity to occupancy and resident mix. | A purchase price can be supported by the property while the operating cash flow supports a smaller loan if sustainable care revenue is lower than assumed. |
| Care minutes | Mandatory care-minute requirements apply to residential aged care. For non-specialised metropolitan homes, some funding has been linked to care-minute delivery through the care-minutes supplement from April 2026. | The roster needed to meet total and registered-nurse care-minute targets, including agency reliance, leave cover and wage sensitivity. | If the forecast EBITDA assumes a staffing level that cannot meet the required care delivery, the lender can normalise earnings down before sizing the loan. |
| 24/7 registered nurse | Residential providers have a 24/7 registered-nurse responsibility, with related government funding arrangements and reporting requirements. | Actual RN coverage, vacancies, agency usage and the cost of maintaining continuous coverage. | A facility that relies on persistent expensive agency cover can have a different sustainable margin from one with a stable employed workforce. |
| Star Ratings | Star Ratings are public. The Staffing rating reflects whether a home meets its registered-nurse and total care-minute targets, alongside Residents' Experience, Compliance and Quality Measures. | Current overall and sub-ratings, trends, compliance history and the operating plan for any weak area. | A weak rating does not mechanically set an LVR, but it can point a credit team toward staffing, compliance, occupancy or capex risks that need to be priced into the case. |
| Catch-up capex and compliance spend | Registration and quality obligations continue regardless of the debt structure. | Fire, building, room, accessibility, clinical-system and refurbishment spend that is required rather than optional. | Cash that must be spent to keep the home compliant or competitive is not free cash for debt service. |
How to present this to a lender
Do not submit one EBITDA number and expect the lender to accept it unchanged. Show the bridge from current trading to sustainable earnings: occupied places, AN-ACC and supplements, resident mix, staffing roster, care-minute delivery, wage assumptions, expected capex, refundable-deposit obligations and the liquidity amount. If a proposed acquisition only services the debt after assuming full occupancy, no staffing catch-up and no capex, the problem is the model rather than the property valuation.
The regulatory facts above are published requirements. How an individual lender translates them into debt size, covenants or conditions is lender credit policy and varies by transaction.
How do lenders size retirement village development and expansion finance?
Retirement village development finance is sized from the project feasibility and the operator's exit path, not from the finished unit prices alone. A lender can look at the as-is land position, staged gross realisation or one-line value, total development cost, resident pre-commitments, construction drawdowns, deferred management fee economics, unsold independent-living units, existing resident exit liabilities and the balance sheet that has to carry the project until it stabilises.
| Issue | Expansion of an existing village | Greenfield village | What the lender is trying to prove |
|---|---|---|---|
| Starting value | Existing village operations, land, occupied units, unsold stock and established DMF economics can give the lender trading evidence. | The starting security may be development land plus approvals, with no operating cash flow from the new village yet. | What value exists before construction and how much of the proposed debt remains covered if delivery or sales are slower than forecast. |
| Demand evidence | Historical unit turnover, waiting lists, resale periods and local demand can support the next stage. | Resident pre-commitments or deposits can be more important because there is no operating history for the new stock. | That there is real demand at the proposed price point and that the project is not relying only on a desktop sales forecast. |
| Construction funding | The operator may be building while the existing village continues to trade and meet resident obligations. | The project may depend almost entirely on staged equity and construction drawdowns until residents settle. | That the cost plan, builder, contingency, approvals and quantity-surveyor reporting support each drawdown and leave enough liquidity for the operating entity. |
| Resident liabilities | Existing exit-entitlement schedules and vacated units can already be drawing on cash while the expansion is funded. | Resident liabilities build as the village opens, but the initial problem is usually construction and settlement timing. | That development debt is not being serviced by cash already needed to repay residents or meet statutory deadlines. |
| Completion and exit | The exit can be stabilisation and refinance, progressive unit settlements, or a portfolio refinance after the additional stage is operating. | The lender needs a credible path from construction debt to settlements, residual-stock finance or a stabilised long-term facility. | How the development facility is repaid if sales are slower, some units remain unsold or the valuation at completion is below the feasibility. |
There is no universal retirement-village presale percentage, LVR or lender covenant that applies to every project. Lenders and advisers describe assessments using measures such as as-is land value, staged gross realisation, pre-commitments, interest cover, LVR, liquidity covenants and DMF registers, but the threshold is transaction-specific. Treat any published percentage as an example of one lender or adviser position, not a market rule.
Can an investor buy an aged care home building and lease it to an operator?
Yes. An investor can own the land and buildings of an aged care home and lease them to a registered provider that runs the service, a structure usually called propco and opco. The investor does not deliver care, so the registration and the approval sit with the operator tenant. The lender then underwrites the lease as much as the property: who the tenant is, whether its registration is secure, and whether the rent is sustainable.
That changes the questions rather than removing them. The tenant's covenant is only as strong as its registration, which usually runs three years against a lease that runs much longer, so the lease needs to deal with what happens if the registration is suspended, varied or not renewed, including how a replacement operator can be brought in. The rent has to leave the operator enough to meet its own deposit refunds and liquidity charge, because a tenant that cannot meet those obligations becomes a regulatory problem before it becomes a rent arrears problem. And the lender will still value the building as specialised property, because its alternative use is limited.
The structure is active. In May 2026 an aged care property fund bought four south east Queensland homes, 456 beds in total, for a reported $90.2 million, each on a 25 year triple net lease to a large not for profit operator. A 25 year lease sitting across a registration renewed every three years or so is exactly the mismatch a lender underwrites. The Aged Care Act 2024 also lets the System Governor determine that an entity is taken to be registered, or a home taken to be approved, for at least three months to keep care going when a provider's services are disrupted. Law firm commentary notes that this raises open questions for financiers, landlords and receivers, so the lease and the facility need to deal with it rather than assume ordinary enforcement.
For the investor the structure behaves more like a passive commercial property loan than an operating business loan, with the differences set out in passive compared with owner operated commercial property. Where the investor and the operator share owners, the related party rules in buying property from a related party also apply.
Sources read 21 September 2026: The Weekly Source, four aged care homes sold for $90M in OpCo/PropCo deal, 19 May 2026; Maddocks, sale and purchase of residential aged care homes under the new Act, 4 December 2024. Otherwise practitioner judgement, indicative, based on care linked and specialised property files Switchboard has placed as at September 2026. Not a statement of any lender's policy. Lease terms are a matter for your solicitor.Who assumes the refundable deposit balances when an aged care home changes hands?
Where the section 312 transfer conditions apply, the outgoing registered provider transfers the relevant refundable deposit balances to the incoming registered provider rather than the buyer injecting fresh equity equal to the whole deposit pool. The acquisition still needs verified resident balances, settlement adjustments, a plan for any shortfall and enough liquidity to meet refunds after completion.
Section 312 of the Aged Care Act 2024 addresses continuity of residential care where one registered provider stops delivering residential care in a home and another registered provider takes over delivery to the same individual in the same home. In that situation the outgoing provider must transfer the refundable deposit balance to the incoming provider in accordance with the Rules. Subsection (4) allows the Rules to disapply the transfer obligation in prescribed circumstances, so the transaction team must read the section and the current Rules together rather than treating the headline rule as automatic in every sale.
For a lender, the useful question is not "does the buyer need to buy the RAD pool?" It is "what resident liability lands in the buyer on day one, what cash and records land with it, and what happens if those numbers do not reconcile?" A deposit transfer can reduce the buyer's new-equity requirement compared with funding every resident balance from scratch, but it does not turn the deposits into acquisition equity or unrestricted cash.
What to reconcile before settlement
- Resident-by-resident balances Reconcile the refundable deposit register to bank records and the sale adjustment rather than relying on a single aggregate balance.
- Transfer conditions Confirm that the statutory continuity conditions and the current Rules apply to the specific transaction and residents.
- Refund timing Model refunds that may fall due shortly after completion rather than assuming the transferred balance can remain deployed indefinitely.
- Liquidity after completion Test the incoming provider against the prudential liquidity rules after the transaction, not only against the acquisition lender's settlement statement.
- Shortfall mechanics The contract should address what happens if the verified liability exceeds the cash or adjustment delivered at settlement. That drafting belongs with the transaction solicitor.
What can a provider do with refundable deposits, and what does the refund clock do to liquidity?
A provider cannot treat refundable deposits as general working capital or use them for ordinary day-to-day operating costs. Section 310 of the Aged Care Act 2024 and the Aged Care Rules 2025 limit use to permitted purposes, which include qualifying capital expenditure and related debt, permitted investments, refunds, qualifying loans and reasonable business losses in defined circumstances. The provider must still maintain enough liquidity to refund deposits when they fall due.
The Commission's current guidance makes the distinction explicit. It lists capital expenditure and related debt, investments, refunding refundable deposits, loans and reasonable business losses as permitted categories, while listing staff wages and consumables, general repairs and maintenance, non-residential-aged-care business activities and personal gain as non-permitted uses. The answer to "can I use RADs for working capital?" is therefore not a bare yes or no: not as a general operating cash pool, although a defined reasonable-business-loss provision can apply in specified circumstances under the Rules. The scale is why lenders look hard at this: providers held about $48 billion in refundable deposits at 30 June 2025, up from $42 billion a year earlier, according to the Department's Financial Report on the Australian Aged Care Sector 2024-25 as reported by Australian Ageing Agenda.
Permitted categories
- Qualifying capital expenditure and directly related debt
- Permitted financial investments under the statutory rules
- Refunding other refundable deposits
- Qualifying commercial loans that satisfy the statutory conditions
- Reasonable business losses in the circumstances allowed by the Rules
Not general operating cash
- Staff wages and ordinary consumables
- General repairs and maintenance
- Business activities outside residential aged care
- Personal gain or gratification
The second half of the question is the prudential liquidity standard. For providers to which Part 3 applies, the default minimum liquidity amount is recalculated quarterly and has three components: a percentage of previous-quarter cash expenses, a percentage of deposited amount balances and, where the registered provider also operates a retirement village, a percentage of refundable retirement village lump-sum entry contribution amounts. A provider can instead elect to use an evaluated minimum liquidity amount under the instrument's process.
Default minimum liquidity amount under the 2025 standard
- 35 per cent of prior-quarter cash expenses The operating-expense limb uses the provider's cash expenses for the previous quarter.
- 10 per cent of deposited amount balances The residential refundable-deposit limb is based on deposited amount balances held at the end of the previous quarter.
- 2 per cent of refundable retirement village entry contributions This additional limb applies where the registered residential-care provider is also an operator of a retirement village.
Source: Aged Care Financial and Prudential Standards 2025, Part 3 and section 11, read 21 September 2026. See also the Commission's Liquidity Standard guidance. Applicability and definitions matter. This is general information, not accounting advice.
For financing, the practical consequence is simple: a dollar visible in the bank account is not automatically a dollar available for debt service. The credit model should separate unrestricted cash, restricted or purpose-limited refundable deposits, upcoming refunds, the prudential liquidity amount and any retirement village exit-entitlement cash calls. If a refinance only works by counting the same cash twice, it does not work.
How do the 2025 accommodation reforms and 2027 payment transition affect aged care cash flow?
They change the timing and composition of cash even where the total government subsidy entitlement does not change. From 1 November 2025, eligible residents can be subject to RAD or RAC retention and DAP indexation; from 1 July 2027, existing residential providers begin a two-year transition away from monthly advances toward payment on services delivered, while new homes commencing from that date are paid fully in arrears.
The cash-flow dates a lender should model
- 1 November 2025 Eligible RAD and RAC balances can have retention deducted at a daily rate of 2 per cent per year for up to five years, and eligible DAPs are indexed twice a year. These rules change resident accommodation cash flows but do not turn refundable balances into unrestricted working capital.
- 1 July 2027 Existing residential providers start the transition to payment on services delivered. The Department states that monthly advance payments will be reduced by an extra 4.17 per cent each month, with arrears paid after the home's monthly claim is processed.
- New homes from 1 July 2027 A residential aged care home that starts operating on or after this date is paid on services delivered from commencement rather than receiving the existing advance-payment profile.
- By July 2029 The transition is intended to reach 100 per cent payment on services delivered. The Department states that the change does not reduce the provider's subsidy entitlement; the finance issue is the timing of receipts and the working capital needed around that timing.
What should the acquisition or refinance cash-flow model include?
Model the month in which money is actually available, not just the annual profit and loss. At minimum, separate government funding receipts, resident DAP and DAC cash, refundable deposit inflows and refunds, RAD and RAC retention, payroll and agency staffing, capex, prudential minimum liquidity, debt service and any retirement village exit-entitlement payments. The transition to arrears can matter most where payroll and resident refunds fall before the corresponding government cash has been received.
What happens to a twenty year facility loan when registration runs three years?
Aged care provider registration usually runs for three years under section 115 of the Aged Care Act 2024, so a twenty year facility spans six or seven renewal decisions the borrower does not control. Lenders manage that mismatch in the covenant package, through renewal milestones and notice of any regulatory action, rather than by shortening the loan term.
Two clocks run across one asset and they do not match. The loan amortises over a term set by the lender and the property. The right to deliver the service, and therefore to earn the revenue that services the loan, runs on a registration period fixed by statute and renewed on application. Nothing in the finance documents changes the second clock, and nothing in the registration changes the first.
Section 115 of the Aged Care Act 2024, "Registration period", sets the period as starting on the day the decision to register is made, or the day after an earlier registration expired on renewal, and ending at the end of three years unless the Commissioner determines a shorter period or another provision applies. The Commission's own Provider Registration Policy puts it plainly: "When the Commission decides to register an organisation or person as a registered provider, they will usually be registered for 3 years."
Scroll the table sideways to see every column.
| Event on the registration clock | What the regulator publishes | What it does to a facility |
|---|---|---|
| The registration period | Usually three years, ending at the end of that period unless the Commissioner determines a shorter one. | A twenty year amortisation sits across six or seven renewal decisions the borrower does not control. |
| The renewal invitation | "We can send this invitation up to 18 months before your current registration expires." | A renewal window can open before the next annual review, so it belongs in the covenant calendar, not the diary. |
| Failure to apply in time | "your registration will expire at the end of the registration expiry date, and you will not be able to deliver funded aged care services." | Revenue stops while the facility keeps amortising. This is the event a lender is actually pricing. |
| Suspension of registration | "If we suspend a provider's registration, Australian Government-funding will stop while their registration is suspended." | A funding stop with obligations continuing is a covenant trigger long before it is an insolvency event. |
| Variation of registration | The Commission can add, change or revoke a condition, remove categories, adjust the registration period or remove an approved home. | The security package can be narrowed by a regulatory decision, without any dealing in the land. |
| Changing the bed number | An increase in the number of beds covered by the approval requires an application to vary, at any time. | An expansion case in a feasibility is an application, not a construction decision. |
The practical answer is that the mismatch is managed in the covenant package rather than in the term. Renewal milestones, notification of any regulatory notice, and the right to information about a variation or suspension are the levers, and they get negotiated at term sheet rather than discovered at the first breach. Where a facility is structured with interest only periods across a construction or repositioning phase, the renewal calendar and the interest only expiry need to be looked at together, which we cover in interest only on a commercial property loan. The same discipline applies to a facility that has to be refinanced rather than run to term, covered in how short a short term business loan really is.
What should you check before signing a contract to buy an aged care home or retirement village?
Before signing, make the contract timetable reflect the regulatory, tax, resident-liability and finance timetable, not only the property settlement date. The buyer should know exactly what is being acquired, which entity will own the property and which entity will operate the service, what Commission decision is required, what resident and employee liabilities transfer, how the transaction is taxed, and what happens if a third-party approval arrives after the contractual finance or settlement date.
Eight questions to answer before exchange
- Is this an asset and business acquisition or a share acquisition? The answer changes which liabilities remain in the acquired entity, what security the lender can take, which contracts need assignment or consent and how the regulatory workstream is approached. A share acquisition does not mean the Commission can be ignored where control, governance or responsible persons change.
- Which entity owns the real estate and which entity operates the service? A property-owning propco, operating opco and incoming registered provider may be different companies. The lender needs to know which entity owns the security and which entity earns the cash that services the debt.
- What Commission decision or notification is actually needed? If the buyer needs registration, a variation to add the home or another approval, put that process on the critical path immediately. Significant sale, acquisition, merger or governance changes can also create notification obligations.
- Does the finance condition fit a care-asset loan? A condition drafted as if the only question is a normal property valuation can expire while registration, operating due diligence, resident-liability reconciliation or specialist valuation work is still outstanding.
- What resident liabilities are being assumed? Reconcile refundable deposits for an aged care home and the residence-contract, deferred-management-fee and exit-entitlement schedules for a retirement village before agreeing the settlement adjustment.
- What happens to employees and operating contracts? Employee service recognition, leave balances, supply arrangements, leases and management contracts can change the settlement cash requirement and the buyer's sustainable earnings after completion.
- What GST, duty and transaction-tax treatment applies? Asset, business, land and share transactions can be treated differently, and state duty rules vary. Confirm the tax and duty position with the accountant and solicitor before using the headline purchase price as the amount of equity needed at settlement.
- Does the long-stop date allow for the regulator's clock? The Commission's Registrar Service Charter states a 90-calendar-day decision commitment once the required information and fee are received, and where an audit is needed the clock runs from the final audit report. An urgent critical date can be flagged, but an expedited outcome should not be assumed.
Contract drafting, tax treatment, conditions precedent, security priority and employee-transfer mechanics require professional advice. The finance point is sequencing: a lender cannot cure a contract date, tax shortfall or regulatory condition that the transaction documents did not allow for.
The Commission now assesses whether a new provider has suitable governance and sound financial-management systems, and Category 6 applicants can be audited against the strengthened Aged Care Quality Standards. The finance application and registration application therefore overlap more than they first appear: related-party loans, leases, management fees and propco/opco arrangements can matter to both the regulator and the lender.
The employment and transaction-professional workstreams run beside the finance workstream. Fair Work publishes the transfer-of-business service-recognition rules, and from 1 July 2026 AML/CTF obligations apply to designated services commonly provided by lawyers, conveyancers, accountants and real estate professionals. These are not lender conditions, but they can change the evidence, timing and cash needed to reach settlement.
Primary sources read 21 September 2026: Aged Care Quality and Safety Commission, becoming a registered provider; Commission, changes in organisation or governance arrangements; Commission, Registrar Service Charter; Fair Work Ombudsman, employee entitlements on a transfer of business; and AUSTRAC, AML/CTF reforms. GST and duty treatment should be confirmed for the actual transaction and state.In what order do provider approval, employees, money laundering checks and settlement actually resolve?
On an aged care home acquisition, the workstreams overlap rather than forming one universal legal sequence. In practice, start the incoming provider registration or variation work as early as possible, run finance and specialist valuation beside it, settle the employee and operating-contract position, complete the AML/CTF and transaction-professional checks that apply, and make settlement conditional on the approvals and continuity mechanics the transaction actually requires.
The order decides whether a settlement date is realistic and whether the conditions in the contract expire before the third parties have finished.
The incoming operator has to be a registered provider in the residential care category, with the home approved to it, before it can deliver funded services. That is a Commission decision with its own timetable. The employees transfer under a separate body of law with its own default positions. The transaction itself now sits inside the anti money laundering regime. And the deposit pool moves under section 312 at completion. Four clocks, four counterparties, one settlement date.
What each limb actually requires, read at source
- Must be recognised On a transfer of business a new employer has to recognise service with the old employer for most entitlements, "including: sick and carer's leave; requests for flexible working arrangements; parental leave".Source: Fair Work Ombudsman, employee entitlements on a transfer of business, read 21 September 2026. The page gives its source reference as the Fair Work Act 2009, sections 22, 91, 122 and 384.
- May be declined Where the new employer is not an associated entity of the old employer, it can choose not to recognise service for redundancy, annual leave, long service leave in defined cases, unfair dismissal where it gives written notice before employment starts, and notice of termination.Source: as above, read 21 September 2026. Each limb has its own conditions on the page and the association test points to section 50AAA of the Corporations Act 2001. If service is not recognised, the old employer pays out the entitlement, so the choice moves cash between the parties rather than removing it.
- 1 July 2026 Anti money laundering obligations for the newly regulated professional services, including real estate, legal, conveyancing and accounting services on a property or business transaction, commenced on 1 July 2026, with enrolment due within 28 days of providing a regulated service.Source: AUSTRAC, summary of AML/CTF obligations for tranche 2 entities, read 21 September 2026. Only the newly regulated virtual asset services commenced earlier, on 31 March 2026. In practice the lawyers, conveyancers and agents acting on a care asset sale run customer due diligence on the parties before they act, so it belongs at the front of the timetable.
- A variation, not a place transfer Under the Aged Care Act 1997 a transfer of allocated places was generally approved within 60 days unless the Department issued a veto. Under the Aged Care Act 2024 the acquiring registered provider applies to vary its registration to include the home, the divesting provider applies to remove it, and the Commissioner must consider the arrangements for continuity of care, such as the transfer of staff and communication with residents and families.Source: Maddocks, what the changes to the Aged Care Act mean for the sale and purchase of residential aged care homes, 4 December 2024, read 21 September 2026; Aged Care Quality and Safety Commission, Registrar Service Charter, read 21 September 2026, which also commits to quick decisions on urgent variation applications where the applicant flags a critical date. Tell the Commission the settlement date when you lodge.
- Then settlement The refundable deposit balances move under section 312 only where there is continuity of residential care to the same individuals in the same home, which assumes the incoming provider is already registered and the home already approved to it.Source: Aged Care Act 2024, section 312, read 21 September 2026. The section describes the outcome, not the timetable. The timetable is set by the Commission's decision on the incoming provider. Its Registrar Service Charter, read 21 September 2026, commits to a decision within 90 calendar days once it has all the information it needs and any fee is paid, with the 90 days running from the final audit report where an audit is needed. That is why the application is the critical path item on most of these files, and why it is lodged before exchange rather than after.
Employment and anti money laundering obligations are quoted from the regulators' own pages and from the Act as published on the date shown. Both regimes are being amended, and neither is a substitute for advice from your employment lawyer and your solicitor on the particular transaction. General information only.
An operator agrees to acquire a home and sets a settlement date from the property lawyer's usual timetable, with a finance condition sized for a commercial property purchase. The valuation comes back on time and the credit decision is straightforward, because the land supports it. What does not come back on time is the registration decision for the incoming entity, which was lodged after the contract rather than before it. The residents cannot be transferred to a provider that is not yet registered for that category, the deposit balances cannot move under section 312 without that continuity, and the employees were given notice on a timetable built around the original date. Nothing here is a credit problem. It is a sequencing problem that became a credit problem, because the finance approval had an expiry, and the Commission's 90 day decision commitment only starts once the application is complete and any audit report is in.
From our broking, indicative
What makes a care asset file harder to place than an ordinary commercial property file, as at September 2026.
- The property file and the operating file are assessed separately and they rarely arrive together. The land, the lease and the valuation sit in one stream, and the registration, the approval, the conditions and the compliance history sit in another. A file that presents only the first stream reads as incomplete, however good the property is. Indicative, based on specialised and care linked property files Switchboard has placed, as at September 2026.
- A registration expiry falling inside the proposed loan term changes the conversation rather than ending it. What a lender asks for is the renewal position, the conditions currently attached and whether anything is on foot with the regulator, and the answer is documentary rather than financial. Indicative, based on files we have placed, as at September 2026.
- Where the vendor and the incoming operator are not the same registered entity, expect the incoming entity's own registration position to become the critical path, and expect it to be asked about before the valuation is instructed rather than after. Indicative, based on deals we have placed, as at September 2026.
- The most common cause of a care asset timetable slipping, in our experience, is a third party decision whose clock starts late sitting inside a contract condition whose clock has already started. The Commission's 90 day commitment runs from a complete application and any final audit report, not from lodgement. That is a drafting question for the solicitor before it is a finance question. Indicative, based on deals we have placed, as at September 2026.
Indicative only, based on files Switchboard has placed, as at September 2026. This is not a quote, not an offer, and not an indication of approval. Nothing here is a statement about any particular lender's policy, timeframe or appetite. Actual outcomes depend on lender policy, the regulator, the valuation and your circumstances at the time of application. Not financial advice.
Where a care asset acquisition is being funded alongside the premises rather than as a standalone business purchase, the structure usually follows the same logic as any other specialised accommodation asset, and the accommodation finance hub collects the related lanes. A care linked asset whose funding follows the person rather than the dwelling behaves differently again, which is the subject of our guide to NDIS and specialist disability accommodation finance.
When can a retirement village exit entitlement create a cash call before the unit resells?
There is no single Australian exit-entitlement deadline. The published outer periods include 12 months in Victoria for contracts from 1 May 2026, 12 months after permanent vacation in Western Australia from 1 September 2026, 18 months after termination in Queensland, and 12 months after vacant possession plus 30 days in South Australia where the unit is not relicensed. Victoria, Queensland, South Australia, Western Australia and Tasmania publish hard outer payment periods or backstops in defined circumstances; New South Wales uses a prescribed-period process that can lead to an exit-entitlement order; the ACT rules differ by tenure and contract; and the Northern Territory position is more contract and legislation dependent. For a lender, the number that matters is the earliest realistic date cash can leave the operator before the next resident or purchaser pays in.
This is why a retirement village can be solvent on paper and still need liquidity. The balance sheet may show unsold units and future resident inflows, while legislation or a residence contract brings an outgoing resident's entitlement forward. The funding model should therefore show each vacated unit, the tenure type, the contract date, the amount owed, the statutory or contractual trigger, the expected resale date and the cash source if resale is late.
Scroll the table sideways to see every column.
| Jurisdiction | Published rule or outer period | Important qualifier | What the finance model should test |
|---|---|---|---|
| Victoria | For the post-reform contract regime, Consumer Affairs Victoria publishes a maximum 12-month timeframe in the relevant exit-payment circumstances, subject to earlier triggers. | The reforms apply by contract date, with material differences for contracts entered before 1 May 2026. Read the actual residence contract and transition rules. | Contract cohort, permanent-vacation date, earlier contractual triggers and any aged-care support payment obligations. |
| New South Wales | After the prescribed period, an eligible former resident can apply for an exit-entitlement order if the premises remain unsold. NSW publishes 6 months for metropolitan areas and 12 months elsewhere for this process. | This is not a universal automatic payment date for every resident. Eligibility, the statutory start point, operator conduct and possible extensions matter. | Prescribed-period start, eligibility for an order, sales process, extension risk and cash available if an order is made. |
| Queensland | An exit entitlement is payable by the contractual date, within 14 days after resale settlement, or at 18 months after termination for an unsold unit. Mandatory purchase rules can also apply around the 18-month point. | The Queensland Civil and Administrative Tribunal can fix a later day, and resident-operated freehold villages that meet set criteria are exempt from the buyback. A 2020 independent review recommended cutting the period to 12 months; the 18-month rule remains the published position. | Termination date, resale progress, mandatory-purchase exposure and the cash required at 18 months if the unit remains unsold. |
| South Australia | Where a residence is relicensed, payment follows the statutory incoming-contribution timing. Where it is not relicensed, the Act provides an outer backstop tied to vacant possession. | The residence contract and whether the unit is relicensed determine which trigger applies. Separate rules can require aged-care accommodation payments on behalf of an eligible departing resident. | Vacant-possession date, relicensing assumptions, expected incoming contribution and any interim aged-care payment obligation. |
| Western Australia | From 1 September 2026, operators generally have up to 12 months after permanent vacation to pay an exit entitlement, with earlier triggers possible. | Residents who left before commencement have transition rules. Eligible residents can also ask for up to 85 per cent of the unpaid exit entitlement to be paid towards aged care accommodation costs, before moving or within 60 days of entering care. An operator can seek an extension or exemption in qualifying circumstances. | Permanent-vacation date, transition cohort, extension application timing and liquidity at the 12-month date. |
| Tasmania | Consumer, Building and Occupational Services states that within the first 6 months after a resident leaves, the operator must refund the portion of the ingoing contribution to which the resident is entitled. | Read the residence contract and Retirement Villages Act 2004 for the particular entitlement and deductions. Separately, where a departing resident needs funds to enter aged care and applies before vacating or within 10 business days after, the Act requires the operator to repay the amount needed within 45 business days, unless the Director extends the period. | Departure date, amount refundable and cash available within the first six months. |
| Australian Capital Territory | The Retirement Villages Act 2012 uses tenure-specific payment rules. Payment triggers differ for registered-interest holders and former occupants who were not registered-interest holders, and the contract can set the payment date. | Do not model the ACT as one blanket outer period. Identify the resident's legal interest and apply the current Act and contract to that tenure. | Tenure type, contract payment clause, sale or incoming-resident trigger and any statutory backstop that applies to that resident. |
| Northern Territory | No single universal outer payment period was established from the current NT Act and government material reviewed for this guide. | That does not mean there is no payment obligation. The Retirement Villages Act 1995, Regulations, village contract and any applicable code or order need to be read for the transaction. | Contract terms, resident rights, current legislation and the earliest enforceable payment trigger identified by the operator's solicitor. |
A village has three vacated units that management expects to resell over the next year. The finance model should not show one blended "expected resale" line. It should show the earliest contract or statutory cash date for each resident and then ask whether unrestricted cash, operating cash flow or a committed external facility covers that date if the unit does not resell. That downside case is what turns a property valuation into a liquidity decision.
Can a lender take security over deferred management fee receivables or unsold units?
A lender can take security over deferred management fees and unsold units only in a limited way. Before a resident leaves, the fee is not yet a recoverable debt under ATO ruling TR 2002/14, so there is nothing to assign beyond what a general security agreement captures. An unsold unit owned outright and free of a residence contract can be mortgaged; otherwise the lender lends against the net position.
A deferred management fee is the operator's largest single source of value in a village, and it is also the one that is hardest to turn into security, because on the tax office's own analysis it is not yet a debt.
Taxation Ruling TR 2002/14, on the taxation of retirement village operators, explains why. Where the fee is calculated on the resident's original entry price, "the village operator cannot properly demand payment of the fee until the resident ceases to reside in the accommodation unit to which the contract relates. That is a condition precedent to the making of a demand for payment. Until the condition precedent is satisfied, the fee does not mature into a recoverable debt." The fee is derived in the year the operator becomes entitled to demand payment. Where the fee is instead calculated on the price paid by the replacement resident, the ruling says the amount "cannot be ascertained with certainty" until the new resident's agreement is in place.
So before the resident leaves there is no recoverable debt to assign. After the resident leaves there is an amount, but it is contingent on a resale that has not happened, and it sits alongside an exit entitlement the operator owes back to that same resident. A general security agreement over the operating entity will capture whatever rights exist, and a lender will register on the Personal Property Securities Register accordingly. What it will not do is treat the future fee stream as a receivable book it can advance against in the way it would advance against trade debtors.
An operator models a facility against the deferred management fees accrued across a village, on the basis that the entitlement has built up year by year under each contract and appears in the accounts. The lender's analysis lands somewhere else. For each unit still occupied there is no enforceable demand, because the condition precedent has not been satisfied. For each unit vacated but unsold there is an amount, but the cash only arrives from an incoming contribution that also has to repay the outgoing resident's exit entitlement, and in some states that entitlement is now due on a statutory deadline regardless. The accrued figure and the amount actually available to service debt are two different numbers, and the gap between them is the resale pipeline. Nothing was overstated. The accounts and the security analysis were answering different questions.
Unsold units sit in a similar place. Where the operator owns the unit outright and it is not subject to a residence contract, it is ordinary real property and it can be mortgaged. Where it is subject to a contract, the residents' rights and the operator's repayment obligation both sit against it, and the lender is lending against a net position rather than a gross one. That is the same structural point as any asset where somebody else's money is inside the balance sheet, and it is why a care asset file is read the way a going concern file is read rather than the way a vacant building is read. Our explainer on what going concern actually means covers the base position, and buying a strata office or shop covers the related question of what a lender does when the security is a part interest in a larger scheme.
If an operator of a residential aged care home has a dispute with its financier, the external dispute resolution scheme most small businesses rely on is very likely unavailable to it on two independent tests. The Australian Financial Complaints Authority "defines a small business as an organisation with less than 100 employees", and it "cannot consider a complaint about a small business credit facility that exceeds $6.3 million (for complaints lodged on or after 1 January 2024)". A residential aged care operator of any scale usually fails the employee test, and a facility against a care asset usually exceeds the credit limit. That does not change the lending decision, but it does change what a borrower's options look like if something goes wrong later, and it is worth knowing before the facility is signed rather than after. What does remain available is set out in what actually protects a business borrower.
Sources read 21 September 2026: Australian Taxation Office, Taxation Ruling TR 2002/14, Income tax: taxation of retirement village operators, paragraphs 39 and 40, read from the ATO legal database; Australian Financial Complaints Authority, small businesses with a financial complaint, including the jurisdictional limits section. AFCA's group exclusion also applies where a business forms part of a group of related companies with 100 employees or more. Whether any particular operator falls inside or outside AFCA's jurisdiction is a question for AFCA and for your own adviser, and the position for a particular complaint depends on AFCA's Rules in force when it is lodged.What if the valuation comes in low or the bank declines or reduces the aged care or retirement village loan?
First identify which constraint actually reduced the loan. A low specialist valuation, weak debt service, a refundable-deposit or exit-entitlement liquidity burden, incomplete registration evidence, an unsuitable ownership structure and a lender's current care-sector appetite are different problems and need different fixes. Moving the unchanged application to another lender without diagnosing the constraint can reproduce the same result.
Diagnose the reason before changing lender
- Valuation constraint Check the valuation basis, stabilised earnings, capex assumptions, tenure or lease assumptions and whether the transaction price contains goodwill or other value the lender will not recognise. A second valuation is not automatically the answer.
- Cash-flow or serviceability constraint Rebuild sustainable earnings after resident liabilities, liquidity requirements, rent, staffing, care-minute delivery, management costs and any normalisation or add-backs the lender will not accept.
- Regulatory constraint Provide the registration, approved-home, conditions, compliance and variation evidence the credit team is missing. A property valuation cannot cure an unresolved right-to-operate issue.
- Liquidity constraint Separate unrestricted cash from refundable deposits and map near-term refunds or exit entitlements. The solution may be lower senior debt, more equity or a properly structured liquidity facility rather than a larger mortgage.
- Structure constraint Revisit propco/opco ownership, related-party leases, guarantees, security priority and which entity earns the cash that repays the debt.
- Lender-appetite constraint Care assets are specialist exposures and appetite changes. If the file is sound but outside one lender's policy or portfolio settings, a broker can test lenders that currently consider the asset class. No approval or timeframe is guaranteed.
Ask the declining lender or credit team for the reason in writing where possible. The next lender presentation should show the issue and the response rather than pretending the first decision did not happen. If the problem is broader than one lender, the fix may be the purchase price, equity contribution, transaction structure or settlement date rather than lender shopping. Our guide on what a broker can do after a bank decline covers the general process.
| Route | When it can fit | What still has to work | When it is the wrong fix |
|---|---|---|---|
| Renegotiate price or settlement | The valuation is below contract or the regulatory and finance timetable no longer fits the agreed completion date. | The vendor must agree and the revised contract still needs to leave enough time for conditions and lender documentation. | Where the underlying business still cannot service the debt even at the revised price. |
| Contribute more equity | The asset and cash flow are acceptable but the senior lender will not fund the full purchase price or development cost. | The buyer must have genuine uncommitted equity after tax, duty, costs, capex and working-capital requirements. | Where the extra equity only hides a weak operating model or leaves the business without liquidity after settlement. |
| Vendor finance | The vendor is willing to leave part of the price outstanding and the senior lender accepts the structure. | Terms, security, subordination, repayment triggers and any senior-lender consent or priority arrangements must be documented. | Where the vendor debt simply creates an unsustainable repayment cliff after settlement. |
| Bridge or private credit | There is a genuine timing problem, such as a fixed settlement, delayed refinance, capital works or a credible path to stabilised bank finance. | Strong property security, a defined term and a specific exit such as refinance, sale or equity injection. | Where there is no realistic take-out. Short-term debt does not repair a permanently over-geared acquisition. |
| Second mortgage or mezzanine | There is an equity gap and the first-ranking facility does not provide enough debt. | Existing-lender consent or an acceptable priority arrangement may be required, and the combined debt service and exit must remain credible. | Where the additional layer makes total leverage or interest cost incompatible with sustainable cash flow. |
| Sale and leaseback or propco/opco restructure | The property and operating business can be separated on commercial terms and the operator can sustain market rent. | Tax, duty, lease terms, registration, related-party issues and lender security must all work together. | Where the rent needed to support the property investor strips too much cash from the care operating business. |
| Stabilise then refinance | Occupancy, staffing, refurbishment, compliance or earnings need time to improve before a long-term lender will rely on the forecast. | The interim funding term must be long enough and the milestones to bank refinance must be measurable. | Where the refinance depends on assumptions with no operational evidence or on a valuation uplift that is not supported by the completed business. |
These are structuring pathways, not recommendations or guaranteed lender options. Security priority, tax, legal documentation and the ability to refinance depend on the actual transaction and lender.
What documents does a lender need to finance an aged care home or retirement village?
A lender financing an aged care home or retirement village needs two packs. The property pack covers the contract, title, leases and building and fire compliance. The operating pack covers the incoming entity's registration and the home's approval, any conditions or notices, the refundable deposit register, the liquidity management strategy, financial statements and occupancy history. A retirement village adds the residence contract register, the exit entitlement schedule and the list of vacated but unsold units.
Property pack
- Contract of sale and vendor disclosures
- Title search and any existing leases
- Building condition and fire safety compliance
- Any development approvals for an expansion or refurbishment
Borrower and structure
- A structure chart showing which entity owns the land and which runs the service
- Trust deed where a trust is involved
- Directors, key personnel and proposed guarantors
- Recent financial statements and year to date management accounts
Aged care operating pack
- Registration of the incoming entity and the approval of the home, including the approved bed number
- Registration period, conditions, and any notices or compliance action
- Current Star Rating and occupancy history
- Refundable deposit register with balances by resident
- Liquidity management strategy and the quarterly minimum liquidity calculation
- Employee and entitlement schedule for the transfer
Retirement village pack
- Residence contract register showing each contract date
- Exit entitlement schedule with dates of vacant possession
- Vacated and unsold units, with marketing status
- Deferred management fee accrual schedule
- State compliance position for each village
Three items save the most time if they are ready before the first conversation: the structure chart, the deposit register or residence contract register, and the registration position of the incoming entity. Everything else can follow, but those three decide how the file is structured and which lenders are worth approaching.
Practitioner judgement, indicative, based on care linked files Switchboard has placed as at September 2026. Individual lenders ask for more or less than this list. Not a statement of any lender's policy.What happens after you contact Switchboard about an aged care or retirement village loan?
The first conversation works out which situation you are in and where the critical path sits, which on a care asset is usually the regulator or the resale pipeline rather than the lender. Switchboard then builds the property and operating packs into one file, checks the contract timetable against the regulatory one with your solicitor, and approaches lenders with appetite for care assets before a valuation is instructed.
Scroll the table sideways to see every column.
| Stage | What happens | What you bring |
|---|---|---|
| 1. The first call | We establish whether you are buying, refinancing, investing in the building or funding an exit entitlement, and which entities are involved | The contract or term sheet if there is one, and a rough structure chart |
| 2. The file build | The property pack and the operating pack are assembled into one file, so a lender sees both streams together | The documents in the checklist above |
| 3. The timetable check | The contract conditions are compared with the regulatory and resale timetables, with your solicitor, so a finance condition does not expire inside the Commission's 90 day decision window | Your solicitor's details and the draft contract |
| 4. The lender approach | Lenders with appetite for care assets are approached, and the covenant package is negotiated at term sheet: renewal milestones, regulatory notices and liquidity | Answers to lender questions, usually about the operating stream |
| 5. Valuation and approval | A specialist valuer is instructed and the lender completes its credit assessment | Site access and the operating records the valuer asks for |
| 6. Settlement | The deposit balances move under section 312, employee arrangements take effect and the facility is drawn | Settlement figures and the deposit adjustment |
No stage has a guaranteed timeframe and nothing here is an indication of approval. If a bank has already declined or reduced a facility, bring its reasons, because a decline from one lender is not a decline from the market, and the reasons usually point at the operating pack rather than the property. What a broker can and cannot change after a decline is covered in can a broker help after the bank declined your loan.
Process as Switchboard runs it as at September 2026. Not an offer, not a quote and not an indication of approval. Actual outcomes depend on lender policy, the regulator, the valuation and your circumstances at the time of application.Also searched as: aged care facility finance Australia, nursing home purchase finance, residential aged care acquisition funding, AN-ACC funding and borrowing capacity, aged care care minutes finance, retirement village operator finance, retirement village development finance, RAD funding for providers, refundable accommodation deposit transfer on sale, aged care provider registration and lending, retirement village exit entitlement funding, care asset acquisition finance, how much can I borrow against an aged care home, aged care home valuation for lending, 2027 aged care payment transition, bank declined aged care loan, bridge finance for aged care acquisition, retirement village operator interest valuation.
Aged care and retirement village finance is not one product. The same customer can move through acquisition finance, specialist valuation, provider registration, refundable-deposit reconciliation, development or refurbishment funding, retirement-village liquidity and eventually refinance or a bank decline. The useful financing question at each stage is what cash flow is genuinely available to service debt after the resident and regulatory obligations are met.
The 2025 aged care reforms changed the security analysis for mainstream residential care by ending the former provider-allocated place system, while specialised programs can still use allocated places. Refundable deposits remain liabilities with restricted uses, and retirement village exit-entitlement timing remains jurisdiction and contract dependent.
Build the finance file around the full customer journey: use of funds, entity structure, specialist valuation, right to operate, resident liabilities, liquidity, settlement sequence and exit strategy. A strong property alone does not answer all eight.Frequently asked questions
Not as a mainstream provider-held residential place under the former allocation system. Provider-allocated places from the former Aged Care Approvals Rounds and bed-ready process ceased on 1 November 2025, and mainstream residential care places are now assigned directly to approved older people. Specialised aged care programs such as Multi-Purpose Services and Transition Care can still use allocated places. A mainstream acquisition is therefore structured around the land, operating business, approved home and incoming provider registration rather than a transferable mainstream bed licence.
Usually not by injecting fresh equity equal to the whole refundable deposit pool where the section 312 transfer conditions apply. Section 312 of the Aged Care Act 2024 requires the outgoing provider to transfer the relevant refundable deposit balance to the incoming registered provider in accordance with the Rules where the statutory continuity conditions are met. The buyer still needs verified resident balances, settlement adjustments, a plan for any shortfall and enough post-settlement liquidity to meet refunds. The Rules can disapply the transfer obligation in prescribed circumstances, so the transaction solicitor should confirm the current position.
Not as general working capital or for ordinary day-to-day operating costs. Current Commission guidance says permitted categories include qualifying capital expenditure and related debt, investments, refunding refundable deposits, qualifying loans and reasonable business losses in defined circumstances. It also says refundable deposits cannot be used for staff wages or consumables, general repairs and maintenance, non-residential-aged-care business activities or personal gain. The provider must still maintain sufficient liquidity to refund deposits when due.
The default minimum liquidity amount in the Aged Care Financial and Prudential Standards 2025 is built from three limbs, not two. Section 11(2) adds 35 per cent of the provider's cash expenses for the previous quarter, 10 per cent of deposited amount balances held at the end of the previous quarter, and, where the provider is an operator of a retirement village, 2 per cent of refundable retirement village lump sum entry contribution amounts. A provider may instead elect under section 13 to hold an evaluated minimum liquidity amount. Percentages are quoted from the instrument as in force on 21 September 2026 and Part 3 only applies to providers registered in the residential care category, excluding government entities. This is general information, not accounting advice.
Only where it is itself a registered provider in the residential care category, and then the answer is that the village money carries its own charge. Section 11(2)(c) of the Aged Care Financial and Prudential Standards 2025 adds 2 per cent of refundable retirement village lump sum entry contribution amounts to the default minimum liquidity amount where the provider is an operator of a retirement village. Part 3 of that instrument applies to providers registered in the residential care category and not to a standalone village operator. Read against the instrument as in force, because the definitions in section 4 do real work. Read 21 September 2026.
Section 115 of the Aged Care Act 2024, headed registration period, sets a period ending at the end of three years unless the Commissioner determines a shorter one, and the Aged Care Quality and Safety Commission publishes that a provider will usually be registered for three years. The Commission can send a renewal invitation up to 18 months before expiry, and states that if a provider does not apply before the date specified in the invitation, the registration will expire at the end of the registration expiry date and the provider will not be able to deliver funded aged care services. The Commission also publishes that if it suspends a registration, Australian Government funding will stop while the registration is suspended.
There is no single Australian deadline. Victoria, Queensland, South Australia, Western Australia and Tasmania publish outer payment periods or backstops in defined circumstances. In New South Wales, the 6-month metropolitan and 12-month non-metropolitan prescribed periods feed an application process for an exit-entitlement order rather than creating one universal automatic payment date. ACT payment rules depend on tenure and contract, and the Northern Territory position must be worked from the current Act, Regulations and village contract. Model the earliest enforceable cash date for each resident rather than one national assumption.
Only in a limited way, because on the Australian Taxation Office's analysis the fee is not yet a debt. Taxation Ruling TR 2002/14 states that the operator cannot properly demand payment until the resident ceases to reside in the unit, that this is a condition precedent to a demand, and that until it is satisfied the fee does not mature into a recoverable debt. Where the fee is calculated on the incoming resident's price, the amount cannot be ascertained with certainty until that agreement is in place. A general security agreement will capture whatever rights exist and the interest can be registered on the Personal Property Securities Register, but a lender will not advance against the accrued fee stream the way it would against trade debtors.
The incoming provider registration or variation work should start as early as possible and run beside finance, specialist valuation, employee and operating-contract work, AML/CTF checks for the transaction professionals involved, and the refundable-deposit reconciliation. The Commission Registrar Service Charter states a 90-calendar-day decision commitment once the required information and fee are received, with the clock running from the final audit report where an audit is required. The contract conditions and long-stop date should therefore be built around third-party decision timing, with the transaction solicitor, rather than assuming a normal property settlement timetable.
There is no standard loan-to-value ratio for an aged care home. A lender sizes the facility against the relevant specialist valuation, sustainable operating cash flow, occupancy, registration and compliance position, refundable-deposit liabilities, prudential liquidity, property security and its current appetite for the asset class. A strong property value can still produce a smaller loan if the operating or regulatory position cannot support the debt. General information only, not an indication of approval.
Two packs. The property pack covers the contract, title, leases and building and fire compliance. The operating pack covers the incoming entity's registration and the home's approval, any conditions or notices, the refundable deposit register, the liquidity management strategy, financial statements and occupancy history. A retirement village adds the residence contract register, the exit entitlement schedule and the list of vacated but unsold units. A file with only the property pack reads as incomplete.
Identify the constraint before moving the same application elsewhere. A specialist valuation shortfall, weak serviceability, refundable-deposit or exit-entitlement liquidity burden, missing registration evidence, ownership or security structure, and lender appetite are different problems. Ask for the reason in writing where possible, rebuild the file around that issue, and then decide whether the next step is more equity, a changed structure or price, a different lender, or not proceeding. A broker can test current market appetite, but no outcome or timeframe is guaranteed.
Yes. An investor can own the land and buildings and lease them to a registered provider that runs the home, a structure often called propco and opco. The investor does not deliver care, so the registration sits with the operator tenant. The lender underwrites the lease: the operator's registration and conditions, its financial position, the rent it can sustain after its own deposit and liquidity obligations, and what happens to the lease if the registration is suspended or not renewed.
From 1 July 2027 to 30 June 2029, residential aged care providers move from monthly advance payments to payment on services delivered. The Department states that each home's monthly advance will be reduced by an extra 4.17 per cent each month, with arrears paid once the monthly claim is processed, and that homes starting on or after 1 July 2027 are paid in arrears from the start. Total subsidy entitlements do not change, but the timing of cash does, so model the monthly gap before seeking more debt.
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Guides, checklists and deep dives, updated weekly across every lane we broker.
- Equipment Finance Declined on Asset Age: What Actually TrippedAsset age policy and how it reads on a file
- Cafe Fitout Finance With No Repayments While You BuildSub-limits and capitalised interest during fitout
- Giving a Lender Access to Your Business Bank Account: What Can They See?Continuous bank feeds and what is visible
- Equipment Line of Credit vs Chattel Mortgage: How to ChooseStructure, drawdown and ownership compared
- What Happens After Equipment Finance Approval: Settlement and PPSR RegistrationFrom approval to funds and registration
- Can a Broker Help After the Bank Declined Your Loan? An Honest AnswerWhat changes and what does not
- How Many Credit Enquiries Is Too Many in Australia?What the credit file actually records
- Home Loan Declined After Pre-Approval? Self-Employed Buyers, What NowWhy pre-approval does not always hold
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