How much are body corporate fees?
Before purchasing a strata title property, learn how much body corporate fees cost and what they cover.
Key takeaways
- Purchasing a strata title can come with benefits like secure living and shared facilities, but these come at a cost known as body corporate fees or a strata levy.
- An owners corporation (formerly known as a body corporate) can set both annual and special fees for lot owners.
- The cost of body corporate fees will depend on what facilities the building or townhouse has.
How much do body corporate or strata fees typically cost?
Body corporate or strata fees vary by property, and can cost $2,000 a year or more.
The cost will depend on the type of building. Buildings with elevators and large facilities, for example, will cost more to maintain than a small complex of townhouses with nothing more than a communal car park.
The cost of your body corporate fees are presented in the budget at your owners corporations annual general meeting. Lot owners must vote on the budget, after which the fees are calculated for each strata title.
Fees vary quite a lot between buildings, and are usually charged on a quarterly or per annum basis.
Prior to purchasing, you can request a copy of the previous strata report to see the previous year's body corporate fees. Fees for future years may be higher, but it's a useful benchmark.
Millions live in strata residences
In New South Wales alone there are 89,049 Strata and Community Title Schemes. More than 1.2 million NSW residents live in a strata or community title scheme. It's estimated there are 350,000 strata schemes nationwide.
What do body corporate fees cover?
Body corporate fees cover all upcoming expenses for the financial year.
Administrative funds: The owners corporation must prepare a budget that estimates expenses like
- Day-to-day administration
- Maintenance
- Repairs
- Strata insurance
Sinking fund: Common expenses like major repair works. The sinking fund grows over time. It isn't necessarily spent every year because most strata properties don't require constant large scale repair works.
Special purpose fund: An extra fee to cover any unexpected large spend, such as an urgent building repair or legal action.
What is not covered by body corporate fees?
Council fees, content insurance and utilities are not covered by your body corporate fees. Nor is the cost of any repairs or maintenance to your own property within the strata. It's important to weigh this up in your budget when considering purchasing a strata title property.
What affects strata fee costs?
There are many factors that impact strata fee costs. The cost of body corporate or strata fees varies depending on a number of factors such as:
- The number of facilities on site that require ongoing maintenance such as a gym, pool or gardens.
- The consideration of the cost of repairs, for example a remote control gate or security swipe entrance can be costly to fix and may result in higher body corporate fees.
- The size and scale of the building, as well as the size of your property.
- The fees charged by the body corporate for their management of the building.
To calculate body corporate fees, the owners corporation estimates future costs and divides this cost over time by the number of units in the strata complex.
According to NSW Fair Trading, an owners corporation could determine that it needs $100,000 over 5 years to cover projected capital works costs, such as maintenance and structural repairs should accidental damage occur. This works out to $20,000 a year over 5 years. If the strata property has 8 units on the title, then this cost would be divided by 8, resulting in a levy of $2,500 per unit per year.
Frequently asked questions about body corporate fees
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