Guide
Sinking fund basics for Queensland bodies corporate
A body corporate’s sinking fund saves for capital and one-off costs, such as repainting, structural repairs and replacing major items. In Queensland, the sinking fund budget each year must cover that year’s capital spending and reserve for likely spending over at least the following nine years.
Who needs one
Schemes under the Standard, Accommodation, Commercial and Small Schemes modules must have a sinking fund. Schemes under the Specified Two-lot Schemes Module do not need formal budgets.
What it pays for
- capital or non-recurring work, such as painting or structural repairs to common property
- replacing major items, such as common property fences or carpets
- other costs that should reasonably come from capital, such as pool furniture
What goes in
Owner contributions, interest earned on invested money, and insurance payouts for major capital items that are destroyed or damaged. Money cannot be transferred between the sinking fund and the administrative fund.
The annual budget and the nine-year reserve
Each year the committee prepares a sinking fund budget for the AGM. It must provide for necessary and reasonable spending in that year, and reserve an amount for likely spending over at least the nine years after the current financial year. That effectively gives a ten-year view of what is coming.
Do you need a professional forecast?
A professional sinking fund forecast is optional. The committee or an owner can estimate future spending instead. Many committees find a forecast useful for larger or older buildings, or where a big item such as a roof or repaint is approaching. Our common property inspection before each AGM helps keep the estimates current.
Investing the fund
Money not needed immediately can be invested, in a way similar to how a trustee invests. The body corporate decides how its funds are managed.
Why it matters in North Queensland
Sun, salt air and storms shorten the life of paint, roofing and balustrades. An underfunded sinking fund often ends in a large special levy. Reviewing the plan each year spreads the cost fairly across owners over time.
Frequently asked questions
How far ahead must a Queensland sinking fund plan?
The sinking fund budget must reserve for likely spending over at least the nine years after the current financial year.
Is a sinking fund forecast compulsory?
No. A professional forecast is optional; the committee or an owner can estimate future spending.
Sources
- Sinking fund (Queensland Government)
- Body corporate budgets (Queensland Government)
- Administrative fund (Queensland Government)
Checked 22 October 2026. The law and official guidance change, so check the current source before relying on it. This page is general information about Queensland body corporate law, not legal advice. For advice about your situation, speak with a lawyer.