Body Corporate Fees: Understanding the Costs of Strata Living in Australia

If you're considering buying a unit, townhouse or apartment, living in a strata complex might be the best option for you. However, understanding the body corporate fees that come with this type of living can be tricky. As an Australian mortgage broker, I've put together this blog post to help you better understand the costs of strata living in Australia. We'll outline what body corporate fees are, how they're determined, and what type of services you can expect from them. We'll also discuss how to budget for body corporate fees when considering your overall home loan repayments. By the end of this post, you should have a better understanding of the costs associated with living in a strata complex.

What are Body Corporate Fees?

Body corporate fees are the fees that are payable by the owners of apartments, units, and other forms of strata-titled property in Australia. They are used to cover the cost of maintaining the common areas of the property, such as the gardens, pools, and shared facilities. They are also used to pay for administrative costs associated with running the body corporate, such as insurance, accounting, and legal costs.

The amount of body corporate fees each owner pays depends on the size of their unit, as well as the services and amenities provided by the body corporate. Generally speaking, the larger the unit, the higher the body corporate fees. It’s also important to note that the fees can go up or down depending on the changes in the body corporate’s costs and services.

When considering the cost of strata living in Australia, it’s important to understand that body corporate fees can represent a significant expense for property owners. As such, it’s important to familiarise yourself with the fee structure of your particular body corporate before buying a unit or apartment. It’s also important to keep an eye on the body corporate fees over time, as well as any changes to the services and amenities offered by the body corporate.

Finally, it’s worth noting that body corporate fees are tax deductible for investors – meaning they can help to offset some of the costs associated with owning an investment property. However, it’s important to remember that body corporate fees are not deductible for owner-occupiers.

How are Body Corporate Fees Calculated?

Body corporate fees, or strata levies, are the fees that are paid by owners of strata-titled properties to fund the running of the building complex or development. They are usually paid on a quarterly or half-yearly basis and are set to cover the costs of the upkeep of the communal areas of the building, as well as any insurance and repairs that may be required.

The calculation of body corporate fees is a complex process that must be undertaken by a qualified strata manager. The fees are usually calculated in accordance with the bylaws of the strata scheme and the body corporate budget. The bylaws will usually set out the different types of expenditure that will be included in the body corporate fees, and the budget will set out the estimated costs for each of these items.

The main factor in determining the level of body corporate fees is the size of the building complex or development. Generally, larger complexes or developments will have higher body corporate fees due to the larger area that is required to be maintained and the associated costs. Other factors that may affect the body corporate fees include the age of the building, the number of owners in the complex, and the type and quality of amenities and services that are provided.

When considering the cost of strata living in Australia, it is important to take into account the body corporate fees that will be payable. It is important to consider the relative size of the complex or development, as well as the number of owners, the age of the building, and the type of amenities and services that are provided. It is also important to consider the estimated costs of the items that are included in the body corporate fees, to ensure that you are paying a fair amount for the upkeep of the building complex.

What are the Benefits of Strata Living?

Strata living is popular in Australia, with many people choosing to live in an apartment or unit block that is owned and managed by a body corporate. The body corporate is responsible for the upkeep and maintenance of the building and its common areas, and strata fees are paid by the owners of the individual units in order to cover these costs.

Though strata fees can be a burden for some, there are significant benefits to living in a strata property. One of the primary advantages is the fact that residents can enjoy communal facilities and amenities that may not be available to those living in a standalone house. This could include a gym, pool, sauna, or BBQ area - features that can add value to the lifestyle of the resident.

Another benefit of strata living is the fact that it often comes with additional security. Many strata buildings have secure entry points, CCTV systems, and gated parking facilities that can provide peace of mind for those living in the building.

Finally, strata living can be cost-effective in comparison to buying a standalone house. As well as shared facilities, strata buildings also have shared costs which help to keep individual unit prices lower. Additionally, due to the shared nature of the buildings, strata residents may benefit from economies of scale when it comes to insurance costs.

When considering the costs of strata living, it is important to weigh up the various benefits against the body corporate fees. In many cases, the lifestyle and cost benefits of strata living can outweigh the costs associated with strata fees.

How Can Homeowners Prepare for Body Corporate Fees?

Body corporate fees are an important part of strata living in Australia, and understanding how to prepare for them is essential for homeowners. Before taking the plunge into strata living, it is important to research the different fees associated with the property, as well as the by-laws of the body corporate.

Homeowners should be aware of the fees associated with strata living, such as the administration fees and sinking funds. Administration fees are used to cover the costs associated with managing the property, such as the insurance, repairs, and maintenance. Sinking funds are set up as a savings account to pay for future major expenses, such as repairs to common areas or improvements to the property. It’s important to understand how much you’ll be expected to pay for these fees so that you can budget accordingly.

When researching a property, it’s important to understand the by-laws of the body corporate, including the rules and regulations set out by the body corporate. These can include things like pet restrictions, noise restrictions, and the use of common areas. It’s important to be aware of these rules so that you can make sure you are compliant with them.

It’s also important to research the body corporate members and their roles. Knowing who is responsible for the body corporate’s decisions can help you understand who to turn to if you have any questions or concerns.

Finally, it’s important to understand the process for making changes to the property or by-laws of the body corporate. This will help you understand how to go about making any changes you may want to make in the future.

By taking the time to research the fees associated with strata living and the by-laws of the body corporate, homeowners can better prepare for the costs associated with strata living. Knowing what to expect can help you budget accordingly and ensure that you are aware of the rules and regulations of the property.

We understand you and we want to help

At Ello Lending we understand that body corporate fees can be confusing and it's important to know what you are signing up for before you commit to strata living. We hope this post has provided some clarity on these fees and the costs associated with strata living in Australia.

If you have any further questions or would like to discuss your individual circumstances, our team of experienced mortgage brokers would love to help. We are here to provide you with advice and guidance on the best mortgage options for your situation. Please don’t hesitate to contact us at Ello Lending today.