Body Corporate Levies Explained

💰 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.

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.