What are strata levies? Your guide to how they work in NSW

Strata levies are the regular fees that keep a shared building running. You might also hear them called strata fees, owners corporation fees or contributions. They cover the costs of maintaining the common areas.

If you are a strata lot owner (that is, you own a unit, townhouse or villa in a strata scheme) you must pay them.

When you buy a unit, townhouse or villa, you automatically join the owners corporation. This is the legal body made up of all owners. The owners corporation manages everything outside your front door including hallways, gardens, lifts, shared facilities, building insurance and more. Your strata levies are your contribution to those shared costs.

Strata levies aren’t optional. Under the Strata Schemes Management Act 2015 (NSW), when an owners corporation gives you a written levy notice, payment becomes a legal obligation.

What strata levies cover and what they don’t cover

You pay your strata levies into two separate funds.

The administrative fund

The administrative fund is the everyday fund. It manages the day-to-day costs of the strata schemes, including:

1. Cleaning and gardening of common areas
2. Utilities such as electricity and water for shared spaces
3. Building and public liability insurance (mandatory in NSW)

The capital works fund

The capital works fund, once known as the sinking fund, covers repairs and maintenance. It pays for capital expenses when they happen, such as:

1. Replacing roofing, lifts or pool equipment
2. Repainting common property
3. Major plumbing and structural repairs

Your strata scheme must have a 10-year plan, including a budget, for major works. The capital works fund must have reserves to cover this budget. Under NSW law, the plan must be reviewed at least every five years, while levy contributions are reviewed at every Annual General Meeting (AGM).

What strata levies don’t cover

Your strata levies don’t cover:

1. Repairs inside your property — internal maintenance is your responsibility as the owner.
2. Individual utility bills — you pay these separately, unless your building uses an embedded network, in which case costs are managed differently. Check with your strata manager if you are unsure.
3. Contents insurance — items like furniture, appliances, curtains and carpets may not be covered by the owners corporation, so it is worth getting your own policy.
4. Council rates and some water charges — these may be paid separately depending on how your scheme is set up.

Do strata levies attract GST?

In most cases, the answer is no, but it also depends on the size of your strata’s income.

Owners corporations only need to register if their annual turnover reaches $75,000.

Larger schemes can tip over that threshold.

After registering for GST, the owners corporation must charge GST on all levies and lodge regular Business Activity Statements with the ATO. However, they also receive a GST credit for all expenses – so regardless of whether a strata scheme is registered or not, the GST impact is neutral.

If you’re unsure whether your scheme is registered for GST, check your levy notice or ask your strata manager.  

Who pays strata levies and how often?

The owner pays, not the tenant

The owner is responsible for paying strata levies.

This is a common point of confusion for landlords and tenants alike. If you rent out your unit, you are still legally liable for the strata levies.

Usually, landlords factor the cost of levies into the rent. But if your tenant doesn’t pay rent, or if your unit is empty, you still have to pay the strata levies.

How often do you pay?

The owners corporation can choose how often strata levies are paid. Usually, it’s every three months, but some schemes bill monthly and some bill annually. Check with your strata manager or committee.

You will get a notice at least 30 days before each payment is due.

How are strata levies calculated?

Your strata levy is not a flat fee.

Every lot in a strata scheme is assigned a number called a unit entitlement. Think of it as your share of the building. A larger or more valuable property will have a higher number than a smaller one in the same building. Your unit entitlement was set when the strata plan was first registered and you can find it on your strata plan. If you don’t have a copy, ask your strata manager.

Each year, the strata committee prepares a budget covering what the scheme needs to spend over the next 12 months. This covers both day-to-day costs and longer-term maintenance. Owners vote on the budget at the AGM, and more than 50% must approve it for it to pass.

Once the budget is approved, the total amount is split between all owners based on their unit entitlements.

Say the scheme needs to raise $100,000 for the year. The building has a total unit entitlement of 100. That works out to be $1000 per unit entitlement point. If your lot has a unit entitlement of 5, you pay $5000 for the year, or $1250 per quarter.

Factors that affect the size of your strata levies

No two strata schemes are the same, and neither are their levies. These factors make the biggest difference:

1. Building age — older buildings often require more repairs, which increases their capital works contributions
2. Size of the strata scheme — more owners mean lower individual contributions. But larger schemes can also add complexity
3. Size and type of your lot — larger lots have higher unit entitlements and pay a bigger share of the total budget.
4. Shared facilities — all add to running costs: the more amenities, the higher the levies
5. Quality of past maintenance — buildings that defer maintenance usually face higher repair costs later, which can lead to increased levies or special levies
6. Insurance costs — one of the biggest expenses in any strata budget, and one which has increased in recent years. Premiums have risen due to climate-related claims, building defects, and global reinsurance market pressures

How often are strata levies reviewed or increased?

Strata levies are reviewed at least once a year, at the owners corporation’s AGM.

At the AGM, the strata committee presents a proposed annual budget. Owners vote to approve it by a simple majority.

There is no cap on how much levies can increase in NSW, and the budget determines the increase. Common reasons for increases include:

1. Rising insurance premiums
2. Inflation pushing up the cost of contractors, cleaning and utilities
3. Aging infrastructure requiring more frequent or more expensive maintenance
4. Capital works fund contributions increasing in line with the 10-year plan

Not every owner gets a vote. Owners who are behind on their levies — called unfinancial owners — cannot vote at a general meeting, except on motions requiring a unanimous resolution. That is why staying up to date with your levies matters beyond just avoiding interest charges.

What to do if you think your strata levies are unreasonable

If your levies feel too high, or you’re not sure what you’re paying for, you have real options. Here is how to approach it step by step.

Step 1: Get the facts

Request a copy of the budget, financial statements and AGM minutes. As an owner, you are entitled to these. Review the AGM minutes to see how the budget was approved and whether any objections were recorded.

Step 2: Raise your concerns in writing

Write to the strata committee and be specific about which items you think are too high or unfair.

Step 3: Put a motion to a general meeting

If the strata committee does not reply, ask to add a motion to the next general meeting agenda for a formal vote.

Are you looking for a strata manager you can trust? We can help.

Contact Us

Strata Master was founded in 1984, and we offer a truly customer-focused fixed fee strata management service.  Contact our Strata Management team or call 02 9909 5300, and we will be happy to assist.