How your individual levy amount is calculated

July 15, 2024

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In a body corporate community, each lot owner is responsible for contributing a share of the expenses necessary to maintain and manage the common property, facilities, and the running of the body corporate. These contributions are referred to as body corporate levies.

Understanding how your individual levy amount is calculated can help you appreciate where your money goes and ensure transparency in the management of your community. Here’s a breakdown of the aspects involved in calculating levy amounts.

What are levies?

Levies are contributions made by all owners to cover the expenses in a body corporate, related to the upkeep of common property, insurance, administration, and other communal services. Levies are typically divided into administrative fund levies, sinking fund levies, and sometimes insurance fund levies.

The frequency of these notices is determined by the body corporate on the number of installments required to meet the annual budget. This decision is made during the annual general meeting (AGM), ensuring owners have a clear and manageable payment schedule throughout the financial year.

Administrative fund levies

These cover day-to-day operational expenses such as cleaning, gardening, insurance, utilities and any contractual arrangements.

Sinking fund levies

These are reserved for long-term expenses like major repairs and capital works, such as painting or pool works, or replacing large items like roofs and elevators.

Learn more about levies, the sinking fund, and the administrative fund.

What influences levy calculations?

1. Contributions schedule lot entitlement (CSLE)

Each lot in a body corporate will have its own CSLE. This number reflects the unit’s proportional share or ownership in a body corporate. This value can be influenced by factors such as unit size, and access and use of scheme’s facilities. Your entitlement determines what share of levies you pay towards the body corporate’s administrative and sinking funds.

2. Annual budget

The body corporate committee prepares an annual budget, forecasting the expenses for the upcoming financial year. This budget includes both administrative and sinking fund expenses. The budget must be passed as a motion at the AGM. The total amount required is then divided amongst all lot owners by their CSLE.

3. Number of units/lots in the scheme

The total number of units in the community naturally affects the levy amount. Generally, more units mean expenses can be spread out more, potentially lowering the amount each owner pays.

4. Common property and facilities

The extent and nature of common property and facilities in the complex – for example, pools, gyms, and gardens, can significantly impact levy amounts. More facilities or assets required to be maintained mean higher maintenance and running costs, which need to be covered by the levies.

5. Insurance

Body corporate insurance is a mandatory requirement in every body corporate, and most often is a significant expense. Body corporate insurance usually includes cover of the building(s) and common property, including any assets and common contents, public liability, office bearer’s liability, and other relevant policy sections that may be applicable to your scheme.

Insurance premiums can fluctuate based on factors like property re-build value and claims history. For more, see our article on what’s covered under body corporate insurance.

6. Maintenance and repairs

Regular and planned maintenance, as well as unexpected repairs, contribute to the overall budget. A well-maintained property might have lower short-term repair costs but will still need regular upkeep to prevent larger expenses.

How your individual levies are calculated

1. Determine the total annual budget

Add up all anticipated expenses for the financial year of your body corporate, including administrative, insurance, and sinking fund requirements.

2. Calculate amount per lot entitlement

Divide the total budget by the sum of all lot entitlements to determine each lot’s share. For example, if the total budget is $100,000 and the sum of all lot entitlements is 100, each lot entitlement represents $1,000.

3. Calculate individual levy amounts

Multiply the lot entitlement amount by each lot’s number of lot entitlements to calculate the levy amount. For example, if your number of lot entitlements is 8, your annual levy would be 8 x $1,000 = $8,000.

Where do I find my unit’s lot entitlements?

The lot entitlements of your unit can be found in the community management statement (CMS) recorded for your scheme. The CMS is a crucial document that outlines the contribution schedule lot entitlements for each unit, specifying how costs are apportioned among the owners.

This document is prepared by the developer at the time of purchase and is lodged with the relevant government authority, making it accessible for reference. If you need to review your unit’s lot entitlements, you can obtain a copy of the CMS from your body corporate manager or through the Titles Office.

How do I know what my levy contributions are and when they are due?

Your levy contributions are communicated to you through regular notices, which the body corporate issues, often through the body corporate manager.

The notice must be issued at least 30 days before the payment is due and must include:

the amount owing
the due date
any discount for early payment, if applicable
any penalty if the payment is overdue
any previous payments that are overdue.

If you have any questions regarding your levy contributions, please contact your scheme’s body corporate manager.

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How your individual levy amount is calculated

A personal approach
to body corporate management

Receive an obligation
free building proposal