If you’re buying a condominium, you may be familiar with the term body corporate. But what does body corporate include? Do body corporate fees include council rates?In this article, we will provide you with more information about this; so if you want to know more, keep reading!

What is a body corporate?

Essentially, a body corporate is like a board of owners who share common property on a piece of land. The body corporate will exist throughout the life of the land being sub-divided with multiple property owners.

If you own a strata title property, you have individual ownership over your apartment, but share the ownership over the common property (e.g. the driveway, foyer, garden, etc.) where your apartment is located with other apartment owners. The common property in question is managed by a legal entity—a body corporate.

What is body corporate fees?

When you buy a strata title, know that you will be subject to body corporate fees (also known as a strata levy). These fees are paid to the owners’ corporation or strata company that manages the property. 

There are two kinds of body corporate fees:

  • Annual fees or capital fund levies – these fees help pay for administration costs, insurance, maintenance and upkeep of common areas of the building.
  • Special fees or special levies – these fees are for unexpected expenses like big repairs or legal costs. Special fees are only charged when annual fees aren’t enough to cover the expenses.

How Much Are Body Corporate Fees?

The amount of money you have to set aside for these fees varies from building to building; you could give anywhere from $1,500 to upwards of $25,000 per year. Typically, these fees will be charged quarterly so are they more manageable for owners to pay. 

Why are body corporate fees so expensive?

Most of the work done by the body corporate requires a comprehensive understanding of local laws and regulations, so many owners choose to outsource the management function and usually get professional strata managers. Since these professionals must deal with complex legislative requirements regarding meetings, finances, and the upkeep of records, a lot of money is spent on these fees.

Note: If you’re buying a strata title property and would like to find out how much you will have to pay for the body corporate fees, ask for a copy of the most current strata report. It will have the previous year’s fees reported. However, remember that the fees can vary year to year.

What are council rates?

Council rates are a form of property tax. All property owners within a municipality have to pay council rates; they serve the purpose of helping to pay for services provided by councils, and maintain local roads, council facilities and public open spaces (such as parks and gardens).

If a problem with the property title is dicovered, to help you protect yourself from a financial loss, read this helpful guide.  

Council rates represent less than 4% of the total taxes paid by Australians, and South Australian households pay on average around $29 per week in council rates.

Do Body Corporate Fees Include Council Rates?

Even if you’ve paid off your mortgage, some of the ongoing real estate costs in Australia don’t just evaporate.

Nevertheless, much like content insurance, utilities, and maintenance of your private property,  council rates are not covered by body corporate fees. 

What is the difference between body corporate fees and council rates? 

The main difference is that body corporate fees go towards any building-related expenses, and council rates are a form of personal property tax you have to pay that ultimately go towards your local council or municipality.

Bottom Line

If you wanted to know what a body corporate is, how much you’ll have to pay for fees and do body corporate fees include council rates, we hope you’ve found this article helpful. Just remember that before buying anything, it’s a good idea to do some research into the housing market in Australia and how much you’ll contribute towards body corporate fees. Happy buying!

1. Are body corp fees tax-deductible?

Body corporate fees may be fully deductible in the financial year they were incurred. You can claim both administration fund expenses and general purpose sinking fund expenses. This may not include special-purpose funds and contributions.

2. What do body corporate fees cover?

Body corporate fees cover any common property-related expenses, such as administration costs, insurance, maintenance and upkeep of common areas. They also cover unexpected expenses like big repairs or legal costs. And if you want to know do body corporate fees include council rates, the answer is no.