What is a special levy? This is what you need to know

A strata special levy is a large, one-off payment that’s separate from the usual strata levies. It can result in phone calls, emails from unhappy strata owners, and sometimes tense meetings.

If you’re an owner trying to make sense of a strata levy, or a strata committee member planning to raise one, understanding special levies can ease the process.

How a special levy is different from regular strata levies

Regular strata levies are set at the Annual General Meeting (AGM) every year. They go into the administrative fund for day-to-day running expenses, and the capital works fund for major repairs and maintenance.

A special levy is different. Under Section 81(4) of the Strata Schemes Management Act 2015 (the Act), the owners corporation must raise special levy contributions when it can’t pay expenses from either fund. A general meeting determines the amount of the special levy.

The levy notice must specify what it will be used for, i.e. a repair, a fund shortfall or legal costs.

So when does a committee find itself needing to raise one?

When does a special levy get raised?

There is no single trigger. NSW Fair Trading says an owners corporation might need to raise a special levy if the current funds can’t cover expenses. The most common situations include:

1. Emergency repairs – urgent works to address a serious and imminent threat to the health or safety of occupants (the definition in the Act).
2. Capital works fund shortfall – the 10-year plan underestimated project costs. As a result, there’s not enough in reserve.
3. Insurance premium spike – premiums have increased recently. A sudden rise can leave the admin fund low.
4. Building defect repair – the owners corporation must pay to repair defects not covered by a developer warranty or insurance.
5. Legal costs – these can add up fast if the owners corporation takes action against a developer or third party. Fees may quickly exceed available funds.

Not every special levy indicates a problem with the management of the scheme. Sometimes, it simply means significant work has come due and the timing didn’t fit the regular budget cycle.

Who decides that a special levy is necessary?

The strata committee can identify the need for a special levy, but it can’t impose one.

Special levies need approval at a general meeting of the owners corporation. This follows the same steps as annual levies.  A simple majority vote is needed.

The committee calls the meeting and presents the case. They discuss the amount needed, its purpose and the payment options: a lump sum or instalments. Owners vote, and the levy can only proceed if it passes. Owners have the right to attend the general meeting, and to ask questions before voting.

Getting to the meeting takes real groundwork.

The committee must get quotes, check inspection reports and understand the full issue before giving owners a figure.

According to NSW Fair Trading, at least 2 independent quotes are needed for items over $30,000.

A simple summary of this work shows the problem, costs and why the levy is the best fix. This helps owners see that the committee has researched thoroughly. That transparency reduces the risk of disputes at the meeting.

This is where a strata manager can make a real difference.

A good strata manager handles inspections and quotes. They prepare a summary for owners and ensure that the general meeting notice is sent out correctly and on time.

For volunteer committee members, that support can mean the difference between a smooth vote and a disputed one.

There is one narrow exception: if a strata managing agent has been delegated all the powers of the owners corporation (e.g. under a compulsory NSW Civil and Administrative Tribunal appointment), the agent can raise a special levy without a general meeting. Outside of this, a vote is always required.

How is a strata special levy calculated?

Special levies use the same formula as regular strata levies. NSW Fair Trading states that both are charged based on each property’s unit entitlement. That number comes from when the strata plan was first registered. It shows each lot’s size and value.

The total amount is set at the general meeting based on the actual cost of the works or shortfall. Once approved, the treasurer divides it between all owners based on their unit entitlement.

For example, if the owners corporation needs to raise $30,000 and the building has 100 total unit entitlement points, the rate will be $300 per point. An owner with a unit entitlement of 5 pays $1,500.

The levy notice issued to each owner must show the exact amount owing and the due date.

How much notice do owners get?

Owners must get at least 30 days‘ written notice before a standard special levy payment is due.

This requirement also applies to regular strata levies. It is outlined in the Act and confirmed by NSW Fair Trading.

There is one exception: if the levy is for emergency repairs, due to a serious health or safety threat, the notice period drops to 14 days. This change came into effect with the 2023 amendments to the Act.

Getting the notice right matters. NSW Fair Trading says that if a special levy isn’t urgent, committees should give owners plenty of notice. This should be more than the legal minimum. The committee (or a strata manager on their behalf) drafts and sends levy notices. They track due dates and ensure clear communication. This helps avoid owners missing payments, or other disputes.

What if an owner can’t afford to pay?

This is one of the most sensitive situations a strata committee manages. NSW strata law now offers better protection for owners facing financial hardship. It also imposes stricter duties on the committee.

Encourage early contact

NSW Fair Trading says that an early chat between the committee or strata manager and the owner helps solve problems. It’s faster than waiting for arrears to pile up.

When a major special levy is announced, clear communication from the committee can prevent hard situations before they begin.

Payment plans are now a committee responsibility

Under the 2025 reforms to NSW strata law (Strata Schemes Legislation Amendment Act 2025), owners can submit payment plan requests directly to the strata committee.

The committee must look at the request. They can only refuse it for certain reasons allowed by the law.

Payment plans are capped at 12 months, with the option to request a further plan once the first ends. Owners can also request that interest on overdue amounts be waived as part of the plan.

The owners corporation must offer a payment plan before starting debt recovery. This is a legal requirement under the 2025 reforms.

Usually, your strata manager takes care of the administration. They manage the standard request form, track the 28-day decision window and send written decisions to owners. This way, the committee can focus on making the decisions.

What happens if an owner doesn’t pay

If a levy isn’t paid by the due date, interest accrues at 10% per year under the Act. Owners in arrears also become unfinancial i.e. they lose their right to vote at general meetings. The only exception is motions that require a unanimous resolution.

 If there’s no payment plan, and the debt is unpaid, the owners corporation can start debt recovery.

Disputes about the levy itself

If an owner thinks the special levy was raised wrongly, they must still follow the process. Interest accrues regardless of a dispute. The committee should encourage owners to raise their concerns in writing. If you can’t solve the issue directly, you can get free mediation from NSW Fair Trading. For more on how arrears and debt recovery work in NSW strata, see What happens when strata levies aren't paid? A guide to levy arrears in NSW.

Special levies are challenging for strata committees. They require additional work, usually mean pressure on finances, and affect owner trust and communications. The committee has to manage:

1. Getting quotes and inspection reports
2. Preparing a clear summary for owners
3. Issuing notices correctly and on time
4. Managing payments and the hardship process that follows

That’s a lot for a volunteer committee to carry. It’s easier if you have a good strata manager on your side. The strata manager helps set up the groundwork before the vote. They keep communication clear. This way, owners feel informed, and not blindsided.

What should you do if you receive a special levy notice?

Read the notice carefully. It must say what the levy is for, how much you owe and when it is due. Attend the next general meeting if you can so you can ask questions and vote. If paying the levy will be difficult for you, contact your strata manager early. The sooner you do, the more options you’ll have.

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 here or call 02 9909 5300, we would be happy to assist you.