Strata Management Group

Where do your Body Corporate levies go?

Understanding where your Body Corporate levies go can help you to appreciate the value of your contribution to the community. New owners may assume that their levies are only covering the cost of the Body Corporate Manager’s services. However, your levies cover the costs of everything required to maintain your Body Corporate scheme annually and in the future.

Levy Classification: Administrative Fund and Sinking Fund

Your Body Corporate Committee determines your levies based on the infrastructure and facilities within the scheme, maintenance requirements, age of the property, and the future direction of asset management. The annual levies are then classified into the administrative fund and the sinking fund.

The administrative fund is primarily responsible for covering the annual day-to-day running costs of the Body Corporate. This includes expenses such as cleaning, grounds maintenance, pool chlorine, electricity for the common area, and insurance. The sinking fund, on the other hand, is used to pay for non-recurring capital expenditure items of the Body Corporate. This includes items such as painting, re-roofing the building(s), intercom replacement, resealing the driveway, etc. The sinking fund is used to maintain a reserve of funds for these future capital expenses.


Every year, an annual budget is established for the administrative fund and the sinking fund. The projected expenditure of the Body Corporate and the projected reserves are considered for each of these budgets. At the annual general meeting, all owners consider and accept or reject the budgets for the ensuing year. The income for this budget is to be contributed to by all the owners on a pre-determined basis, known as a lot entitlement. Lot entitlements (contribution and interest) for each lot are contained within the Community Management Statement (CMS) registered upon formation of the Body Corporate.

Levy Notices and Arrears Process

The Body Corporate Manager prepares the levy notices and sends them to each owner, often on a quarterly basis, although each scheme may differ. It is crucial to ensure prompt payment is made so that the cash flow of the Body Corporate remains consistent to meet its expenditure requirements. For this reason, some Bodies Corporate offer a discount to ensure the prompt payment of levy contributions.

At Strata Management Group, we have a detailed arrears process to assist your Body Corporate’s cash flow. We provide owners with reminders if they miss the due date, and if the levies are still unpaid, we follow a system to bring the money in as quickly as possible to ensure the Body Corporate has the cash flow it needs to meet its commitments.

SMG Administration Agreement Fees

Strata Management Group (SMG) is engaged by your Committee for an agreed fee to attend to the secretarial and financial functions on behalf of the Body Corporate. This fee is detailed in the SMG Administration Agreement.

We prepare meeting documentation, attend the required meetings, and ensure the actions from those meetings are attended to and recorded. The minutes of all meetings and decisions of the Body Corporate are also maintained to ensure a full and accurate record of the history of the Body Corporate and made available to all owners via the SMG online portal.

Our services may include matters such as the preparation of proposed budgets, convening, sending notices for, and attending the annual general meeting, in addition to forwarding minutes to all owners. We also provide these same services for committee meetings held by your Body Corporate.

In addition, SMG attends to routine correspondence and assists your Body Corporate in ensuring that it is compliant with legislative issues.

The Financial Team at SMG looks after financial matters, including opening and operating the strata community’s bank account, attending to payment of accounts, issuing contribution notices to lot owners, and receipting those payments. We also carry out reconciliation of the accounts and preparation of financial statements at the end of the financial year.


Understanding where your Body Corporate levies go is important for every owner in a Body Corporate scheme. The levies cover the costs of maintaining the scheme and its facilities, paying for day-to-day expenses and preparing for future capital expenses. The levies are divided into the administrative fund and the sinking fund, which cover different types of expenses. The annual budget is established for each fund, and owners contribute to it based on their lot entitlements.

Prompt payment of levies is essential for the cash flow of the Body Corporate, and arrears process can be put in place to ensure timely payments. The Community Management Fee covers the cost of engaging a Body Corporate Manager, who attends to the secretarial and financial functions on behalf of the Body Corporate.

At Strata Management Group, we understand the importance of efficient and effective Body Corporate management. Our experienced team can help you manage your Body Corporate scheme, ensuring that all financial and administrative tasks are handled professionally and efficiently. With our assistance, you can be confident that your Body Corporate is in safe hands, and your levies are being used effectively to maintain your community.

Looking for a New Body Corporate Manager?

Read Further:

The Role of the Committee

Change Strata Managers

Gold Coast Body Corporate Management

Sunshine Coast Body Corporate Management

Brisbane Body Corporate Management

Role of the body corporate