Body Corporate Fees and Costs Explained
Levies, budgets, and what you actually pay for.
One of the first things new owners want to know is where their money goes. Body corporate levies can feel like a mystery, but they do not have to be. This page breaks down everything you need to know about fees, levies, sinking funds, and what happens if costs get out of hand. If your scheme’s fees seem too high, get 3 free proposals from established and trusted managers who can review your budget.
What are body corporate levies?
Levies are the regular contributions every lot owner pays to cover the running costs of the body corporate (or owners corporation in NSW). They fund everything from insurance and maintenance to gardening, cleaning, and administration. Levies are usually charged quarterly and are set each year at the annual general meeting based on the approved budget.
How are levies calculated?
Each lot in a scheme has a “lot entitlement” or “unit entitlement” that determines its share of the total levies. This is usually based on the relative value or size of the lot when the scheme was first registered. A larger penthouse will typically pay more than a small one-bedroom unit. The total budget is divided among all lots according to these entitlements.
What do my levies actually pay for?
Your levies cover two main funds. The administrative fund pays for day-to-day expenses like insurance premiums, body corporate management fees, gardening, cleaning, utilities for common areas, and minor repairs. The sinking fund (capital works fund in NSW) pays for major long-term expenses like repainting, roof replacement, lift upgrades, and large structural repairs.
What is the difference between the admin fund and the sinking fund?
The administrative fund covers everyday running costs that happen regularly, like insurance, cleaning, and management fees. The sinking fund is a savings account for big future expenses that only come around every few years or decades, like repainting the building or replacing the roof. Both are funded through your levies, but they serve very different purposes.
What is a special levy?
A special levy is a one-off charge on top of your regular levies, raised to cover an unexpected or urgent expense that the existing funds cannot cover. This might happen if the building needs emergency repairs, the sinking fund is underfunded, or a major piece of infrastructure fails. Special levies must be approved by a vote at a general meeting.
Can I refuse to pay a special levy?
No. Once a special levy has been properly approved at a general meeting, every lot owner is legally required to pay their share. Even if you voted against it or did not attend the meeting, you are still bound by the decision. Unpaid levies attract interest and can lead to debt recovery action against you.
What happens if I do not pay my levies?
Unpaid levies are treated as a debt. The body corporate can charge penalty interest, issue formal demands, and ultimately take legal action to recover the money. In serious cases, a charge can be placed against your property. This means the debt must be settled before you can sell your lot. Falling behind on levies is not something to ignore.
Think your levies are too high?
A fresh set of management proposals can reveal whether your scheme is getting value for money. Body Corporate Gold Coast connects you with established and trusted managers who can review your budget and fees.
Can the committee increase levies without a vote?
No. Levy amounts are set as part of the annual budget, which must be approved by lot owners at the annual general meeting. The committee cannot unilaterally increase levies. If there is a genuine emergency expense, the committee may call an extraordinary general meeting to propose a special levy, but it still requires a vote.
How can I find out where my levy money is being spent?
You are entitled to see the body corporate’s financial statements at any time. These are presented at the AGM and should be available from your body corporate manager on request. The statements break down income and expenses for both the administrative fund and the sinking fund. If something does not add up, raise it at the next meeting or contact the committee directly.
What is a sinking fund forecast?
A sinking fund forecast (also called a capital works plan) is a report that estimates the major maintenance and replacement costs the scheme will face over the next 10 to 30 years. It helps the body corporate set levy contributions at a level that builds enough savings to cover future works without needing large special levies. In Queensland, schemes with more than a certain number of lots are required to have one.
Is a sinking fund forecast mandatory? (QLD)
In Queensland, body corporate schemes regulated under the Standard Module or Accommodation Module must prepare a sinking fund forecast. It must be reviewed at least every five years and is used to set the sinking fund contributions in the annual budget. Smaller schemes regulated under the Small Schemes Module have fewer requirements but are still encouraged to plan ahead.
Is a capital works fund plan mandatory? (NSW)
In New South Wales, all owners corporations must prepare a 10-year capital works fund plan. This plan must be reviewed at least every five years and outlines the expected major expenses and the contributions needed to fund them. It is a legal requirement under the Strata Schemes Management Act 2015.
What is lot entitlement and how does it affect my levies?
Lot entitlement (called unit entitlement in NSW) is the number assigned to your lot that determines your share of levies and voting rights. It is set when the scheme is first registered and is usually based on the relative market value or size of your lot. A lot with a higher entitlement pays a larger share of the levies. Changing lot entitlements is possible but requires a formal process and is not common.
Can I challenge my lot entitlement? (QLD)
In Queensland, you can apply to the Body Corporate and Community Management Commissioner’s office to have your lot entitlement reviewed if you believe it is unfair or incorrect. The process involves an adjudication application and evidence showing the entitlement does not reflect the relative value of your lot compared to others in the scheme. It is not a quick or simple process, and getting professional advice first is recommended.
Can I challenge my unit entitlement? (NSW)
In New South Wales, lot owners can apply to the NSW Civil and Administrative Tribunal (NCAT) to have unit entitlements re-allocated if they believe the current allocation is unjust. You will need to demonstrate that the entitlements do not accurately reflect the relative values of the lots at the time the strata plan was registered. Legal advice is strongly recommended before starting this process.
What are body corporate management fees?
Management fees are what the body corporate pays the professional manager (or strata manager in NSW) to handle the scheme’s administration. This typically covers meeting preparation, levy collection, record keeping, insurance management, correspondence, and compliance. Fees vary depending on the size and complexity of the scheme. Comparing proposals from multiple managers is the best way to ensure you are paying a fair price.
Are body corporate fees tax deductible?
If your lot is an investment property, your body corporate levies are generally tax deductible as a rental expense. This includes both administrative fund and sinking fund contributions. If the property is your primary residence, levies are not deductible. Always check with your accountant or tax advisor for advice specific to your situation.
Why do levies differ so much between schemes?
Levies reflect the actual costs of running and maintaining the scheme. A small townhouse complex with no shared facilities might have levies of $500 to $1,500 per quarter. A large high-rise with a pool, gym, lifts, concierge, and extensive common areas could charge $3,000 to $6,000 or more. The age and condition of the building also plays a big role, as older buildings tend to need more maintenance and larger sinking fund contributions.
Ready to compare management fees?
If you are not sure whether your scheme is paying a fair price for management, let us help. Body Corporate Gold Coast connects you with three established and trusted managers who will provide tailored proposals for your building, completely free. See how it works or get started now.
Explore more topics
Keep learning about how your body corporate works:
- Getting Started – the basics of body corporate and strata explained
- Financial Management – budgets, reporting, and how your money is managed
- Maintenance and Repairs – who pays for what and how maintenance is handled
- Strata Managers and Changing Providers – find a better manager for your scheme
Browse all topics on the Knowledge Hub, or meet our management partners.
Related guides
- How Are Body Corporate Fees Calculated? – The budget, contribution schedule entitlements, and a worked example.
- Who Pays for the Body Corporate Manager? – Where the manager fee comes from and what each owner is funding.
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Primary sources and further reading
The information on this page is drawn from the following primary sources. Use these for the definitive legal position in your jurisdiction.
Queensland
- Body Corporate and Community Management Act 1997 (Qld)
- Queensland Government, Body corporate information
- Queensland Civil and Administrative Tribunal (QCAT)
New South Wales