Strata education
What is strata? A guide for new owners and committees
21 Jun 26
3 min read
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Investment, fees & finance
A clear guide to strata levies, what they cover, how they are calculated and what owners should check on their levy notice.
Need help understanding your scheme’s obligations?
Strata levies are payments made by lot owners to help cover the shared costs of managing, maintaining and repairing a strata scheme. They are usually based on the approved budget and paid on a regular schedule, often quarterly. Each owner’s share is generally calculated using unit entitlements, lot entitlements or the relevant contribution schedule.
In simple terms, levies give the scheme the funds it needs to pay regular expenses and prepare for future works.
Strata levies are not optional. They are part of owning a lot in a strata scheme and are usually agreed at an annual general meeting.
Strata levies help pay for shared property expenses in a strata scheme. The exact costs depend on the building, its facilities, its approved budget and the legislation that applies in each state or territory.
Most strata levies contribute to three main areas: regular operating costs, longer-term building costs and, when needed, specific one-off expenses.
Administrative fund levies are used for the regular operating costs of the scheme. These are the recurring expenses needed to keep the building insured, serviced, maintained and functioning day to day.
They usually relate to costs that come up throughout the year, such as:
These levies help the scheme meet its regular obligations and keep common property properly managed.
A sinking fund is money set aside for larger future works, major repairs and long-term maintenance. Depending on the state or territory, this may also be called a capital works fund or maintenance fund.
The purpose is to help the scheme prepare for future costs, rather than relying only on urgent or unexpected contributions.
It may contribute to:
A special levy is a one-off contribution raised for a specific cost that is not covered by the approved budget or available funds.
A special levy may be raised for:
Special levies are separate from regular administrative and capital works fund levies. They are usually approved by resolution at a general meeting and the amount, reason and payment timing should be clearly communicated to all owners.
Regular maintenance planning can reduce the risk of unexpected special levies.
Strata levies are calculated by preparing a budget for the scheme, then dividing the approved contributions between owners according to unit entitlements, lot entitlements, interest entitlements or contribution schedules.
The process generally works like this:
For example, if a scheme's administrative fund budget is $120,000 per year and one lot holds 10% of total unit entitlements, that owner's administrative levy would be $12,000 annually.
Levies are not set by the strata manager. They reflect the financial needs of the building and the decisions made by the owners corporation, body corporate or owners association at the AGM.
A levy notice is the formal notice sent to owners showing the amount due, the due date and payment details.
It usually includes:
Owners should read levy notices carefully and raise questions early if something does not look right. It may also help to check the approved budget, meeting minutes or financial statements for context.
If strata levies are not paid on time, the amount becomes overdue and is recorded as levy arrears.
Unpaid levies can affect the scheme’s cash flow. This may make it harder to pay insurance premiums, maintenance costs, utility bills and supplier invoices. Depending on the state or territory, overdue levies may also attract interest, recovery costs or formal debt recovery action.
If an owner is having difficulty paying, contacting the strata manager or committee early is usually the most practical step, rather than waiting until the debt increases.
If your committee needs clearer financial reporting, levy administration or support with arrears follow-up, Bright & Duggan can help guide the process with structured strata management support.
Understand the rules that apply inside a strata scheme, including pets, noise, parking, renovations and breaches.
Understand how strata contributions work, what they usually cover and what owners should check on levy notices.
Learn how repair responsibilities are usually managed and when issues should be reported.
For state-specific guidance around strata levies, body corporate contributions, owners corporation fees and unit title levies, refer to the relevant authority in your state or territory:
General Advice Disclaimer
The information on this page is general in nature and does not constitute legal, financial or professional advice. Requirements, processes and obligations can vary by state, territory and individual scheme. Before making decisions, we recommend seeking independent advice specific to your scheme, property and jurisdiction.
