Why Do I Pay Levies and What Are They For?
Strata levies are the financial contributions made by lot owners to fund the operation, maintenance and long-term sustainability of their Owners Corporation. They are not simply a fee paid to a strata manager—they are the primary source of funding that keeps your building operating safely, legally and efficiently while protecting the value of every owner’s investment.
Levies are determined each year as part of the Owners Corporation’s budget and are approved by owners at a general meeting. The amount each owner contributes is generally based on their unit entitlement.
Your levies typically fund two important areas:
Administrative Fund
The Administrative Fund covers the day-to-day operating costs of the scheme, including:
- Building insurance.
- Cleaning and gardening.
- Electricity and water for common property.
- Lift, fire safety and essential service maintenance.
- Strata management fees.
- Routine repairs and maintenance.
- Utility costs and service contracts.
- General administration and compliance costs.
Capital Works Fund
The Capital Works Fund (formerly known as the Sinking Fund) is established to pay for major repairs and replacement of common property over the life of the building. This may include:
- Roof replacement.
- Painting common property.
- Lift refurbishment.
- Driveway resurfacing.
- Waterproofing works.
- Major building services.
- Other significant capital expenditure identified in the Capital Works Fund Plan.
Maintaining adequate reserves in the Capital Works Fund helps reduce the likelihood of unexpected special levies and ensures the Owners Corporation can plan for future expenditure rather than simply reacting when major works become necessary.
Why Keeping Levies Low Isn’t Always Best
Many owners naturally want to minimise levies, but setting levies too low can create larger financial problems in the future. Underfunded maintenance often leads to building deterioration, more expensive repairs and the need for significant special levies when major works can no longer be delayed.
A well-managed Owners Corporation aims to strike the right balance—keeping levies fair and reasonable while ensuring sufficient funds are available to maintain the building, meet legal obligations and protect property values over the long term.
At Strata Real Estate Services, we work closely with committees to prepare realistic budgets, develop long-term financial plans and provide transparent reporting so owners understand where their money is being invested. Our team, including a qualified CPA, helps ensure financial decisions support both the immediate needs and future success of your strata community.
Your Strata, Our Expertise.