How Are My Body Corporate Levies Calculated – And Why Have They Gone Up?

If you own a unit, townhouse or apartment in Queensland, you’re likely paying body corporate levies – regular contributions that help keep your community running smoothly. But if your levies have recently increased, you might be wondering: why the change?

In this post, we break down how body corporate levies are calculated, the different types of levies, and the key reasons they may rise from one year to the next.

What Are Body Corporate Levies?

Body corporate levies are the financial contributions all lot owners make to cover the costs of maintaining and managing common property. This includes everything from gardens and lighting to insurance, administration, and future building repairs.

These levies are governed by the Body Corporate and Community Management Act 1997 (BCCM Act), which outlines how bodies corporate operate in Queensland.

Types of Levies Explained

There are four common types of body corporate levies:

• Administration Fund Levy

Covers everyday operational costs like cleaning, gardening, electricity for common areas, insurance, and body corporate management fees.

• Sinking Fund Levy

Used for long-term capital works and repairs such as repainting the building, replacing roofs, or resurfacing driveways.

• Insurance Levy

Some schemes charge this separately. In others, it’s included within the administration fund. The insurance levy is based on each lot’s interest entitlement.

• Special Levies

Raised when unplanned or urgent costs arise that aren’t budgeted for in the existing funds – for example, storm damage repairs or emergency maintenance.

How Are Levies Calculated?

Levies are calculated annually and approved at your scheme’s Annual General Meeting (AGM). Here’s the process:

1. Budget Creation

The committee prepares an annual budget estimating the costs required to run and maintain the scheme for the upcoming year.

2. Apportioning Costs by Lot Entitlements

Each owner’s share of the levies is based on their lot entitlements, which are outlined in the Community Management Statement (CMS).

• Contribution Lot Entitlement determines how much each owner contributes to the levies.

• Interest Lot Entitlement is used in certain decisions, including voting rights and insurance apportionment.

Why Have My Levies Gone Up?

There are several reasons your levies might increase:

• Rising Costs

Like everything else, the cost of maintenance, services, and insurance tends to rise over time due to inflation.

• Upcoming Repairs or Upgrades

If major works are planned and the sinking fund is low, levies may increase to cover these upcoming expenses.

• Improved Services or Facilities

Enhanced security, new landscaping or facility upgrades mean more outgoings, which impact the budget.

• Unexpected Expenses

Emergencies like storm damage or equipment failure might prompt a special levy or a general increase to replenish reserves.

• Compliance or Legal Requirements

New laws or safety obligations (like fire upgrades or new pool fencing regulations) can result in higher costs that must be factored into the levies.

How Often Are Levies Paid?

Typically, levies are paid quarterly, but your body corporate may have a different schedule. You’ll receive a levy notice with payment due dates and any available discounts for on-time payment.

What Happens If You Don’t Pay?

Falling behind on your levies can lead to:

• Loss of Discount

Many schemes offer up to 20% off for prompt payment.

• Interest and Late Fees

Overdue levies may attract interest and penalty charges.

• Debt Recovery

Continued non-payment can lead to legal recovery action, including court proceedings or a charge placed on your property.

Got questions about your levies or your scheme’s budget?

We’re here to help. Reach out to the team at Peak Body Corporate Management via info@peakbcm.com.au or call us on 07 5528 9999.