How are body corporate levies calculated?

The body corporate Annual General Meeting sets the budgets for the financial year, agrees on the amount that will be levied towards each lot, the number of instalments to be paid, and the dates on which they are due.

In general, the levies are based on the lot entitlements as set out in the scheme’s Community Management Statement (CMS). Lot entitlements set out each owner’s body corporate cost and voting rights, the share of common property and other assets, and the lot value upon which government rates and other charges are calculated.

Occasionally, an additional levy may be required, known as a special contribution, to pay for an unexpected cost that has either not been budgeted for or for which there are insufficient funds to cover. A special contribution must be agreed to by an ordinary resolution of members.

Can I receive a discount on my body corporate levies?

In general, a body corporate can offer discounts for early payment or penalties for late payment to encourage lot owners to meet their debt obligations on time.

A body corporate must pass an ordinary resolution to determine the level of discount or penalty.

The discount cannot be more than 20% of the instalment amount. The penalty for late payment is simple interest at a set rate of not more than 2.5% per month overdue.

Can a body corporate refund excess levies?

While it is possible for a body corporate in Queensland to refund unspent money from annual levies to lot owners, usual practice is to carry any excess into the following year’s administrative or sinking fund.

A decision either way must be made by owners at the annual general meeting.

By carrying the excess into the following year’s funds, fluctuations in levies are avoided, helping maintain financial stability within the funds.

It’s important to note that excess contributions cannot be used for unbudgeted purposes.

Further reading

• What are body corporate levies?
• Can a body corporate recover unpaid levies?
• Committees need to manage funds for the long-term
• Body corporates must secure agreement before extra costs