20 May Body Corporate Fees in Victoria – A Simple Guide for Owners Corporations
What are Owners Corporation fees and what do the fees cover in an Owners Corporation in Victoria? A simple guide to strata fees.
If you own an apartment, townhouse, or unit in Victoria, you’ve likely encountered Owners Corporation fees, also known as body corporate fees, strata fees or levies. But what are strata fees exactly? Why do they vary so much? And most importantly, what do strata fees cover?
This Guide breaks down Owners Corporation fees in Victoria, using simple language to help you understand your costs.
What Are Owners Corporation Fees?
In Victoria, an Owners Corporation (OC) is the legal entity responsible for managing common property such as hallways, lifts, gardens, and shared infrastructure.
Owners Corporation fees (sometimes called strata fees, body corporate fees, or OC fees) are regular payments made by property owners in a shared development. These fees fund the operation, maintenance, and management, of common property.
At each Annual General Meeting the owners corporation approves a budget to meet the anticipated recurrent expenses of the Owners Corporation for the current year. The approved budget is apportioned to each owner in accordance with the lot liability set out in the plan of subdivision and fee notices issue, usually quarterly but may be half yearly or in rare cases, yearly.
By whatever and name these are identified, in simple terms these are shared costs paid by all owners in a strata or owners corporation.
What Do Owners Corporation Fees Cover?
A common question is: what do strata or what does body corporate cover?
While inclusions vary depending on the building, most owners corporation fees in Victoria usually cover the following.
Maintenance and Repairs
- Cleaning of common areas
- Gardening
- Lift servicing and repairs
- General building upkeep
- Minor repairs
- Essential services maintenance and reporting
Insurance
- Building insurance (mandatory in Victoria for almost all OCs)
- Public liability insurance for common property
Utilities for Common Areas
- Electricity for lighting in hallways and car parks
- Gas or electricity for bulk hot water or heating systems where installed.
Management Fees
- Professional owners corporation management services
- Administrative support (meetings, financial reporting, compliance)
Maintenance Fund
- Larger owners corporations such as a Tier 1 (affecting more than 100 occupiable lots) and Tier 2 (affecting between 51 and 100 occupiable lots) are required to have a statutory maintenance plan to identify and fund the long-term capital needs of the building. Where there is a statutory maintenance plan the annual fees must include an amount sufficient to fund the plan in any given year.
- Other owners corporations may have a sinking or capital works fund intended to fund the long-term capital needs such as, painting, major roof repairs, replacement of fences and other major assets. A sinking fund may identify particular assets or may be a general fund to use to repair or replace capital items as these arise.
General Surplus
An owners corporation needs to have a surplus available to meet unanticipated expenses requiring immediate action and expenditure. A well-managed owners corporation will have an accumulated surplus that can be used if the need arises. The quantum of the surplus will depend upon the type, style, size, and complexity of the building and a prudent budget will allow for an unallocated surplus each year to ensure the surplus is on hand if required.
Do Owners Corporation Fees Include Council Rates or Water Rates?
Council and water rates are separate and paid directly to the relevant council and water authority. Owners Corporation fees cover only shared property expenses incurred by the Owners Corporation and not individual property rates and taxes, therefore body corporate fees (aka strata fees) typically do not include council rates.
How Much Are Owners Corporation Fees in Victoria?
The cost varies widely depending on:
- Property size and facilities
- Building age and condition
- Location (e.g., city versus suburban)
- Number of lots
Average Body Corporate Fees in Melbourne
While there is no fixed figure for an average body corporate fee in Melbourne or Victoria, general estimates are:
- Low-rise buildings (no lifts): $1,000–$3,000 per year
- Mid-range apartments: $3,000–$6,000 per year
- High-end complexes (with pools, gyms, lifts): $6,000–$15,000+ per year
- Commercial properties such as shops, offices, factories and warehouses will vary depending upon the size, occupancy type, complexity of infrastructure and particular features of the development.
What Affects Your Strata Fees?
Not all body corporate fees Melbourne are equal. Key factors include the following.
Building Amenities
Pools, gyms, lifts, and concierge services increase costs significantly.
Building Age
Older buildings may require more frequent repairs and higher maintenance funds.
Size of the Owners Corporation
Smaller buildings often have higher per lot costs because expenses are shared among fewer owners.
Management Quality
Efficient owners corporation management services can reduce unnecessary costs and improve financial planning.
What Is a Special Levy?
Sometimes, regular fees aren’t enough to cover unexpected or major expenses. This is where a special levy owners corporation Victoria comes in.
A special levy is:
- A one-off payment sometimes payable instalment depending upon the terms set by the Owners Corporation in Melbourne
- Typically used for major repairs or urgent works such as painting of common property, replacement of fencing, major roof repairs
While necessary at times, frequent special levies may arise because:
- The annual fees approved at the AGM budget only comprehend the recurrent expense each year and make no provision for the longer term needs
- The annual fees are insufficient to meet the recurrent needs of the owners corporation
- Extraordinary or unforeseen matters such as a collapsed sewer arise
Understanding OC Fees vs Value
Many owners focus on cost alone but the real question is: Are you getting value for your owners corporation fees?
Low fees might seem appealing, but can lead to:
- Poor maintenance
- Underfunded reserves
- Future special levies
On the other hand, appropriate fees should deliver:
- Well-maintained facilities
- Transparent financial reporting
- Responsive management
To recap:
- Owners corporation fees (strata fees / body corporate fees) cover shared property costs
- Do not include council and water rates and taxes
- Fees vary depending on building size, facilities, age, complexity and infrastructure
- Value matters just as much as cost
A properly financed owners corporation doesn’t just save money – it protects your property value and improves your living experience.