Question 1

What is the difference between body corporate fees and strata levies?

Accepted Answer

In Tasmania they are the same thing. Owners and agents use both terms, and you will also hear "strata fees" and "body corporate levies" for the same payment. The formal term is a contribution levied by the body corporate on its members. If someone quotes you a "strata fee" and a "body corporate fee" as two separate charges, ask them to itemise it, because that is unusual.

Question 2

How are body corporate fees calculated in Tasmania?

Accepted Answer

The body corporate approves a budget at a general meeting covering what the scheme expects to spend for the year. That total is then divided between the lots according to unit entitlements, which are set out on the final page of the registered strata plan. Unit entitlements are usually based on the relative value or size of each lot, so a larger unit generally carries a larger share. Your levy is therefore your slice of a budget the owners approved, not a figure a manager decides on its own.

Question 3

What do body corporate fees cover?

Accepted Answer

For most Tasmanian schemes the budget covers building insurance and public liability cover, which the body corporate is legally required to hold; repairs and maintenance to common property; electricity, water and any other services to shared areas; cleaning, grounds and rubbish removal where the scheme has them; compliance items such as fire equipment servicing and any plant registrations; administration, including the strata manager's fee; and a contribution towards future major works. What it does not cover is anything inside your own lot. That is yours.

Question 4

What is the difference between the administrative fund and the sinking fund?

Accepted Answer

The administrative fund pays this year's running costs: insurance, routine maintenance, utilities, administration. The sinking fund, sometimes called a capital works or reserve fund, is money accumulated for large and predictable future expenses such as reroofing, repainting, resurfacing a driveway or replacing a lift. A scheme with a healthy sinking fund absorbs a new roof without drama. A scheme without one issues a special levy, and every owner finds a five figure bill in the letterbox with a month to pay it.

Question 5

Why are the fees at one building so much higher than at another?

Accepted Answer

Because the buildings are different, and almost nothing else. The cost drivers in Tasmania, roughly in order of impact, are: insurance, which has risen sharply and is driven by rebuild value, building age and construction type; lifts, pools, gyms and basement carparks, each of which carries its own servicing and compliance regime; the age and condition of the building; how much common property there is to maintain, since a large landscaped site costs more than a shared driveway; and whether the scheme is funding its future properly or quietly deferring it. Two buildings on the same street can differ several fold and both figures be entirely correct.

Question 6

What is the average body corporate fee in Tasmania?

Accepted Answer

We are not going to quote one, and you should be wary of anyone who does. A statewide average blends a two lot scheme sharing a driveway in Kingston with a lift serviced apartment building in the Hobart CBD, and the resulting number describes neither. It is quoted often because it is easy to publish, not because it is useful. The honest answer is that your fee is determined by your building and your scheme's budget, and the only meaningful comparison is against schemes of similar size, age and facilities. We are happy to tell you where a particular scheme sits.

Question 7

Is the strata manager's fee the same as the body corporate fee?

Accepted Answer

No, and the distinction matters when you are comparing managers. The management fee is one line item inside the body corporate budget, and it is usually a small proportion of the total, with insurance and maintenance making up far more. When comparing proposals, the question that separates them is not the headline fee but what sits inside it and what is billed on top. Ask any prospective manager to list what is a standard duty and what is an additional charge, in writing. A low fee with a long schedule of extras is not a low fee.

Question 8

Are body corporate fees tax deductible?

Accepted Answer

Where the lot is an investment property, body corporate levies are generally deductible against rental income in the year they are paid, though contributions to a special purpose fund for capital works are usually treated differently. Levies on a home you live in are not deductible. This is general information and the treatment depends on your circumstances, so confirm it with your accountant rather than with us.

Question 9

What happens if an owner does not pay their levies?

Accepted Answer

The shortfall does not disappear. In the short term the other owners carry it, because the insurance premium and the electricity bill still arrive. A body corporate can generally charge interest on overdue contributions and recover the debt, and unpaid levies routinely surface at the point of sale because they attach to the lot rather than following the person. In practice, the earlier a manager raises arrears, the more often it is sorted out with a payment arrangement instead of a recovery action.

Question 10

How can a body corporate reduce its fees without cutting corners?

Accepted Answer

The reductions that hold are unglamorous. Have the building professionally valued for insurance rather than indexing last year's sum insured, because schemes are commonly over insured as often as under. Test the insurance market properly at renewal instead of accepting the roll over. Put recurring maintenance on a schedule rather than paying emergency rates for work that was predictable. Fund the sinking fund steadily, because deferral is not a saving, it is a larger bill later with less warning. The reductions that do not hold are skipping maintenance and underinsuring, both of which show up eventually as a special levy.

Question 11

Who decides how the money is spent?

Accepted Answer

The owners do, at a general meeting. The body corporate approves the budget and authorises the spending. A strata manager prepares the budget, presents the options, gets the quotes and then carries out what the owners decide, and keeps the records that prove it was done properly. If you feel your scheme's spending is being decided somewhere other than at a meeting of the owners, that is worth raising, and it is a fair question to put to any manager.

Body Corporate Fees in Tasmania

What body corporate fees pay for in Tasmania