Who pays the body corporate fees, the owner or occupier?

The owner is responsible for all body corporate fees, including regular levies and additional costs for repairs or maintenance.

Are body corporate fees tax deductible in Australia?

Generally, yes, fees for routine maintenance and management are deductible. Costs for major improvements or renovations are not.

How to know if body corporate fees are being used effectively?

You can tell your body corporate fees are being used effectively when the building shows clear management and consistent upkeep, including: • finances and reports are clear and easy to understand • regular maintenance and repairs are consistently carried out • a healthy sinking fund is maintained for future works • budgets are transparent and well-planned • supplier quotes are competitive • repair requests receive prompt responses

Our Body Corporate Fees Guide | Change Body Corporate

If you own a unit, townhouse, or apartment in Australia, you’ve likely asked yourself, “What am I really paying for with these body corporate fees?”

Understanding where your money goes and how it’s managed can help you avoid unexpected costs and ensure your contributions genuinely add value to your property.

Here’s a straightforward look at body corporate fees: what they cover, what they don’t, and how you can make them work in your favour.

Key takeaways:

Body corporate fees cover shared area upkeep, insurance, and management, but don’t include private repairs or personal utilities.
There are four main levies: administration, maintenance/sinking fund, special purpose, and insurance, each serving a specific purpose to keep your building running smoothly.
Fees vary depending on building size, amenities, age, lot entitlement, and location. Planning with early repairs, a healthy sinking fund, and energy-efficient upgrades can help reduce costs.

What are body corporate fees

Also known as owners corporation fees or strata levies these are regular contributions made by property owners in building to manage and maintain their shared areas like driveways, lifts, gardens, pools, or foyers.

Each owner contributes based on lot entitlements or lot liability, which are set when the building is first registered. Larger lots or those with higher entitlements naturally contribute more.

Your fees will depend on factors like:

size and condition of the building
number of lots (residences)
quality of management and upkeep
amenities available (pool, gym, lift, etc.)
age and maintenance history of the building
owners and body corporate management company involved

How are body corporate fees calculated?

Every year, the body corporate (or owners corporation) approves a budget at its Annual General Meeting (AGM). This budget determines how much each owner pays for the coming year.

Your personal contribution is calculated as:

(Total annual budget ÷ total lot liability) × your lot liability

This means that if your property’s lot entitlement is higher, your share of the total fees will be higher too.

What do body corporate fees cover?

Administration fund levies

This fund covers day-to-day running costs like insurance, gardening, cleaning, minor repairs, and general administration. Think of it as the operational cost of keeping your building running smoothly.

Maintenance fund (or sinking fund) levy

The maintenance fund, often called the sinking fund, is designed to prepare your building for major works and long-term expenses.

Regular contributions to this fund ensure that when large-scale projects arise like roof repairs, repainting, lift upgrades, or plumbing replacements so there is already money set aside. This prevents owners from being hit with sudden, one-off levies for costly repairs.

In Victoria, recent legislative changes have made planning even more important. Under the Owners Corporations and Other Acts Amendment Act 2021, which came into effect on 1 December 2021, a certain body corporate is now legally required to develop and approve a maintenance plan.

The Victorian tier system explained

The legislation introduced a five-tier classification system for body corporate, based on the number of occupiable lots in a development:

Tier 1: more than 100 lots
Tier 2: 51–100 lots
Tier 3: 10–50 lots
Tier 4: 3–9 lots
Tier 5: 2-lot subdivisions

For Tier 1 and Tier 2 developments, having a maintenance plan is mandatory. These plans outline future repair and replacement needs, often prepared with the help of a building consultant or quantity surveyor to ensure the property is financially prepared for upcoming works.

Tier 3 to Tier 5 body corporate aren’t legally required to create a maintenance plan but can choose to do so as a best-practice approach. Having one in place encourages smarter budgeting, protects property values, and prevents unexpected levies down the track.

Ultimately, this tier system brings greater transparency and financial responsibility to Victoria’s shared properties, ensuring buildings of all sizes are managed with foresight and fairness.

Special purpose levy

Sometimes, unexpected expenses arise, storm damage or urgent safety repairs. In these cases, the body corporate can raise a special levy that all owners must pay to cover the exceptional costs.

Insurance levy

Most body corporates hold a separate insurance levy that covers building insurance and public liability for shared areas. Note that this does not include your personal contents or private unit interior.

What do body corporate fees typically cover?

Your fees usually pay for:

Cleaning of shared spaces (lobbies, hallways, stairwells)
Gardening and landscaping
Building insurance
Lift and fire safety maintenance
Repairs to external structures
Pest control
Utilities for shared areas (lighting, water, etc.)
Administrative services and professional management

What body corporate fees don’t cover

Body corporate fees do not pay for:

Private property repairs or improvements inside your unit
Your own electricity, water, or gas bills (unless on a shared meter)
Council rates or personal insurance
Individual upgrades (air conditioning, appliances, etc.)

What happens if fees aren’t paid?

Unpaid levies increase costs for other owners and can delay essential repairs or maintenance, thus leading to:

reminder and interest penalties
legal recovery actions
loss of voting rights at meetings

Staying current with your payments protects not only your property but also your building community.

What are ways to save money on body corporate fees?

Body corporate fees don’t have to spiral out of control. Here’s how to manage them wisely:

address issues early: fixing minor maintenance problems early avoids bigger, costlier repairs later
build a strong sinking fund: regular contributions prevent emergency levies
review insurance premiums annually: ensuring adequate cover without overpaying can save thousands
switch to energy-efficient lighting: shared area power bills can drop dramatically
review your management company: if you suspect poor use of funds or weak performance, consider changing your manager.

Are your body corporate fees being used effectively?

If you feel that these fees aren’t being used sufficiently or that any of the above tasks are not being completed, it may be time for a change.

At Change Body Corporate, we help property owners take control of their buildings through effective management that builds trust and delivers results.

Get in touch with our reliable consultants to discuss your property and ensure your fees are working for you, not against you.