Body Corporate Fees Explained: What They Cover & How Much They Cost

Overview

If you are buying an apartment, unit, townhouse, or any property within a strata scheme, you will need to pay body corporate fees (also called strata levies or owners corporation fees, depending on the state). These fees fund the management and maintenance of shared areas and common property. Understanding what they cover and how much they cost is essential for budgeting — whether you are buying to live in or as an investment.

What Is a Body Corporate?

A body corporate (called an owners corporation in Victoria and NSW, or a community corporation in SA) is the legal entity made up of all the lot owners in a strata scheme. It is responsible for managing and maintaining the common property — everything outside your individual lot that is shared with other owners.

When you buy a strata-titled property, you automatically become a member of the body corporate and are required to pay levies to fund its operations.

What Do Body Corporate Fees Cover?

Body corporate fees typically cover the following:

Administration Fund (Operating Costs)

• Building insurance: The body corporate is legally required to insure the building structure and common property. This is usually the single largest expense.
• Common area maintenance: Cleaning, gardening, lighting, and general upkeep of lobbies, hallways, driveways, car parks, and outdoor areas.
• Utility costs: Water, electricity, and gas for common areas (lifts, lighting, pools, fire safety systems).
• Body corporate management fees: Professional strata managers charge fees to handle administration, meeting coordination, record-keeping, and compliance.
• Repairs and maintenance: Ongoing repairs to common property — plumbing, electrical, painting, and general wear and tear.

Sinking Fund (Capital Works Fund)

• Major repairs and replacements: The sinking fund (called the capital works fund in some states) is a reserve fund for large, planned expenses such as roof replacement, lift refurbishment, repainting the building exterior, waterproofing, or replacing common area carpets and fittings.
• Building defect rectification: Costs to repair structural or building defects, particularly in newer buildings.

The sinking fund is built up over time through regular contributions so that the body corporate does not need to issue special levies when major works are required.

Additional Items (Depending on the Building)

• Pool and gym maintenance: Heated pools, gyms, and other amenities add significantly to fees.
• Concierge or security: Buildings with on-site staff have higher levies.
• Lift maintenance: High-rise buildings with multiple lifts have higher servicing costs.
• Fire safety compliance: Regular inspections, testing, and certification of fire safety systems.

How Much Do Body Corporate Fees Cost?

Body corporate fees vary enormously depending on the type and size of the building, its age, location, and amenities. As a general guide:

• Small block of units (no lift, no pool): $500 to $2,000 per year
• Medium apartment building: $2,000 to $5,000 per year
• Large building with lift, pool, gym: $4,000 to $8,000 per year
• Luxury high-rise with concierge, pool, gym: $8,000 to $15,000+ per year

These figures are per lot per year and include both administration and sinking fund contributions. Some premium buildings in Sydney and Melbourne CBDs have body corporate fees exceeding $15,000 per year.

Factors That Affect Body Corporate Fees

Several factors influence the level of fees:

• Building age: Older buildings often have higher maintenance costs and may require more sinking fund contributions for upcoming capital works.
• Amenities: Every additional facility (pool, gym, sauna, rooftop terrace, concierge) adds to operating and maintenance costs.
• Building size and height: High-rise buildings have lifts, fire systems, and facade maintenance that low-rise buildings do not.
• Number of lots: Costs are shared across all lot owners. A building with fewer lots means each owner pays a larger share.
• Location: Insurance premiums, contractor costs, and water/energy prices vary by location. North Queensland properties, for example, pay higher insurance due to cyclone risk.
• Management quality: Well-managed buildings with proactive maintenance plans tend to have more predictable fees. Poorly managed buildings may face unexpected special levies.

How to Check Fees Before Buying

Before purchasing a strata property, you should:

1. Request the body corporate records: In most states, you can obtain a body corporate search or strata report (sometimes called a Section 184 certificate in Queensland, a Section 108 certificate in Victoria, or a strata search in NSW). This reveals current levies, the sinking fund balance, any outstanding special levies, and minutes from recent meetings.
2. Review the sinking fund balance: A healthy sinking fund suggests the building is well-managed. A low balance may indicate upcoming special levies.
3. Check for planned works: Meeting minutes often reveal upcoming maintenance or repairs that could lead to increased levies or special levies.
4. Look for disputes or litigation: Ongoing legal disputes can be costly and divisive.
5. Ask about recent fee increases: A history of large annual increases may signal ongoing cost pressures.

Impact on Investment Returns

Body corporate fees directly reduce your net rental income and investment yield. For example:

• A property earning $25,000 per year in rent with $5,000 in annual body corporate fees loses 20% of gross income to levies alone — before accounting for other costs such as council rates, water, insurance, and management fees.
• Higher body corporate fees reduce your net yield and can make an otherwise attractive investment much less appealing.

Use our Investment Property Yield Calculator to model how body corporate fees and other costs affect your net rental yield.

When comparing investment properties, always factor in body corporate fees. A freestanding house has no body corporate fees, which can make it a better net yield proposition even if the gross rent is similar to a comparable apartment.

Special Levies

If the sinking fund is insufficient to cover a major repair or unexpected cost, the body corporate can issue a special levy — a one-off payment required from all lot owners. Special levies can range from a few hundred dollars to tens of thousands of dollars per lot, depending on the nature of the work. This is why checking the sinking fund balance before buying is so important.

Calculate your investment yield: Investment Property Yield Calculator | Estimate purchase costs: Property Purchase Cost Calculator.

Sources: ASIC Moneysmart, Strata Community Association, NSW Fair Trading — Strata Living, Queensland Government — Body Corporate.