The new premises are likely to feature residents grouped together in small households, with their own kitchens, dining lounges and laundries. There would also be a "supermarket" on site so they could go with staff to buy groceries.
People who shared common interests and backgrounds could be grouped together and houses decorated to reflect that.
General manager Therese Jeffs said the idea worked on the basis that people were not dying of ailments such as heart disease or pneumonia, they were dying of loneliness, helplessness and boredom.
Mrs Jeffs said the launch of the home and hospital's new name was a big step towards an exciting future.
"Adding CARE to the name is a simple change that acknowledges the significant improvements we have made in a short amount of time. It readies us for the major developments to come."
Mrs Jeffs said they needed to move from their current premises on Hinemaru St - a former nurses' home - which allowed them to start from scratch and move away from the clinical atmosphere.
"If we're going to build, we wanted to build something that is flagship."
Mrs Jeffs was planning to travel to the Netherlands next month to visit De Hogeweyk for more ideas, which she said was "really exciting".
She said the new concept worked in line with the Eden Alternative philosophy, which the organisation had adopted.
The philosophy aims to improve the wellbeing of the people who live there by providing companionship, allowing people to give care as well as receive it, and creating an environment filled with spontaneity and variety.
"It's going to be really exciting. Nobody has done it in New Zealand." The plan was to at least cater for the 80 residents they had but they hoped to be able to double the numbers. She said eventually they would like to be able to cater for 200.
