Calculation of Levies

The calculation of levies is done by using the formula of the participation quota of each unit in a sectional title scheme, in order to determine their contribution towards the repair, upkeep, management, control and administration of the common property.

The function of a body corporate in the Sectional Title Act

In the Sectional Titles Act, the entrusted functions of a body corporate include the establishment of funds to cover administrative expenses, the payment of rates and other local municipal charges, as well as raise the levy contribution on the owners in proportion to the participation quota of their section.

What is a participation quota?

According to the Sectional Titles Act, a participation quota is a formula used to determine the percentage that an owner should contribute towards the collection of levies.

The participation quota of a section is expressed by four decimal places which can be arrived at by dividing the floor area to the nearest square metre, as determined by the developer.

The formula for the calculation of levies

Levies can be calculated using the following formula:

Calculating a participation quota

Total square meters of a sectional title scheme ÷ Total square meters of each unit = Participation Quota.
e.g.  1162 m2    ÷     95 m2   =  8.1756

Calculating a levy

Total budgeted amount x participation quota of the unit = Amount 
e.g.  R 221 088.00    x    8.1756    =    R 180 7527.05
( R180 7527.05    x    100.0000) ÷ 12    =    R 1506.27
Rounded off to a total of R 1506.00

Van Deventer and Van Deventer Incorporated

If you have any queries relating to the calculation of levies, or if you want a clarified understanding of the participation quota, contact the experts at Van Deventer and Van Deventer Incorporated.

 

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