Body Corporate Levies Explained
🏢 What a Body Corporate and Its Levies Are
If you buy an apartment or a townhouse on a unit title, you do not just buy your own space. You also become part of a body corporate, the group of all the owners that looks after the shared parts of the building. To do that, the body corporate collects levies from owners. These levies are an ongoing cost of owning the property, on top of your mortgage and rates, and they can vary a lot between buildings. Understanding what they pay for, and how to read them before buying, can save you from an unwelcome surprise.
Why Levies Exist
A building has costs that belong to everyone: insuring the whole structure, keeping the lifts running, cleaning the foyer, maintaining the grounds, and eventually repainting or re-roofing. No single owner can be left to pay for these, so the body corporate shares them through levies. In return, the shared parts of your home stay insured, safe and maintained.
Levies Are Not Optional
Paying your levies is a legal obligation of owning a unit title. They are set collectively and you must pay your share, just like rates. Falling behind can lead to penalties and, ultimately, recovery action, so they need to fit comfortably in your budget alongside your other housing costs.
💰 The Two Funds and Special Levies
The Operating Fund
The operating fund covers the regular, year-to-year running costs of the building. Your operating levy pays into it, and the body corporate draws on it for the everyday expenses of keeping the place going.
- Insurance: Insuring the whole building, usually the largest single cost.
- Management: Fees for the body corporate manager who runs the administration.
- Common-area upkeep: Cleaning, gardening, lighting, lifts and shared utilities.
The Long-Term Maintenance Fund
The long-term maintenance fund, often shortened to LTMF, is money set aside for big, infrequent repairs that are predictable but years away, like repainting the exterior, replacing a roof or refurbishing lifts. A long-term maintenance plan maps out these future works, and the fund is built up steadily so the money is there when the work is needed.
Special Levies
Sometimes a cost arises that the funds do not cover, perhaps an unexpected major repair or a shortfall in the maintenance fund. The body corporate can then strike a special levy, a one-off charge on owners to raise the money. Special levies can be large and land with little warning, which is exactly why a healthy long-term fund is so valuable.
Use our Property Title Types guide for how unit title works, and the Mortgage Calculator to budget your total housing cost.
📊 How Levies Are Set and What to Check
Set by the Owners, Shared by Entitlement
Levies are decided collectively at the body corporate's annual general meeting, based on a budget for the year ahead. Your share is usually based on your unit entitlement, a measure of your unit's value or size relative to the others, rather than split equally. A larger or more valuable unit typically pays a larger share.
| Element | How it works |
|---|---|
| Setting the levy | Agreed at the AGM from the annual budget |
| Your share | Usually by unit entitlement, not split equally |
| Operating levy | Funds day-to-day running costs |
| Long-term maintenance levy | Builds the fund for big future repairs |
What to Check Before You Buy
When buying a unit title, you are entitled to disclosure about the body corporate, and you should read it carefully. The records tell you whether the building is well run and well funded, or whether trouble is brewing.
- Current levies: How much you will pay, and how they have changed over time.
- The long-term maintenance plan and fund: Whether big works are planned and the fund is on track to pay for them.
- Minutes and financials: Recent meeting minutes and accounts, which reveal disputes, defects or looming costs.
- Any planned special levies: Whether a large one-off charge is already on the horizon.
✅ Common Mistakes and What to Do
Mistake 1: Forgetting Levies in the Budget
The trap: Working out affordability on the mortgage and rates alone.
Why it costs: Levies can add a significant ongoing amount. Leaving them out can make a property look more affordable than it really is. Always include them.
Mistake 2: Choosing the Lowest Levy
The trap: Picking the building with the cheapest levy.
Why it costs: A low levy can mean the long-term maintenance fund is underfunded, setting up a big special levy later. A sustainable levy that keeps the fund healthy is often the better deal.
Mistake 3: Skipping the Disclosure and Minutes
The trap: Buying without reading the body corporate records.
Why it costs: The records reveal defects, disputes and planned special levies. Skipping them means buying blind to problems you will inherit.
Mistake 4: Ignoring a Looming Special Levy
The trap: Overlooking a planned major repair the building cannot yet pay for.
Why it costs: You could be hit with a large special levy soon after buying. If one is coming, factor it into your offer or reconsider.
A Simple Action Plan
Where to Go Next
Use the Property Title Types guide for unit title, the Reading a LIM Report guide for property checks, and the Mortgage Calculator to budget the full cost.
Final word: Body corporate levies fund the shared parts of a unit-title building, split into an operating fund for everyday costs and a long-term maintenance fund for big future repairs, with special levies for unexpected work. They are an unavoidable ongoing cost, so budget for them, read the body corporate records before buying, and value a healthy maintenance fund over the lowest levy. Done well, you avoid nasty surprises and buy into a well-run building. This is general information, not legal advice, so have a solicitor review the disclosure before you buy.
🎯 Test Your Knowledge
Quiz on Body Corporate Levies (20 Questions)
Frequently Asked Questions
What are body corporate levies?
Regular payments unit-title owners make to fund the shared parts of the building, such as insurance, maintenance and a long-term maintenance fund.
What do body corporate levies cover?
An operating fund for day-to-day costs like insurance, cleaning and management, and a long-term maintenance fund for big future repairs.
What is a special levy?
A one-off charge struck when a cost arises that the existing funds do not cover, such as a major unexpected repair.
What should I check before buying a unit title?
The current levies, the long-term maintenance plan and fund, recent minutes and accounts, and whether any special levy is planned.
Related guides
- ACC Levies Guide, a related guide in the same area.