Sinking funds and administrative funds explained

Explaining budgets

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Receive an obligation-free proposal

We offer an obligation-free quote.

The first step is a short phone or in-person meeting to better understand the needs of your committee and scheme. This will only take around 10 minutes.

From there, we’ll put together a tailored proposal, including our easy-to-understand fee package.

Submit our proposal form, including the best contact time, and we’ll be in touch.

Receive an obligation
free proposal

We'll need to get some details about your building. Let us know the best time to contact you.

Check out our Complete Guide to Body Corporate Levies

If you’ve been living in a body corporate for at least a few months, you may have noticed two fund types on your levy contribution notices – the administrative fund and the sinking fund. Both are common to all bodies corporate, yet the expenses they cover are very different.

Here’s a quick guide to each, what they’re used for, and how the levies are calculated.

The administrative fund

The administrative fund covers costs associated with the day-to-day running of a body corporate. Things like repairs and maintenance, insurance, utilities, the body corporate manager, and an onsite manager or caretaker if you have one.

The sinking fund

The sinking fund, on the other hand, is the body corporate’s savings account. A place where the building accumulates funds over a longer period of time, reserved for capital expenditure only. Examples of sinking fund expenses would be repainting the building, resurfacing the driveway, pool or lift refurbishments, as well any ‘old for new’ capital replacements of any assets or infrastructure.

How are the levies for the administrative and sinking fund calculated

Each owner within the body corporate will pay their share of the administrative and sinking fund levies based on their contribution schedule lot entitlement (CSLE). You’ll find your CSLE disclosed in the community management statement (CMS). Ask your body corporate manager for a copy if you don’t have one.

Generally speaking, the administrative fund contributions will increase in line with economic factors, like CPI and inflation.

The sinking fund however is completely different. As the body corporate’s long-term savings account, funds are raised based on the annual requirements identified in the sinking fund forecast, and levied to owners as per their individual CSLE.

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