The Complete Guide to Understanding Your Strata Levies in 2026
Most apartment owners pay thousands in strata levies each year without truly understanding where the money goes. Whether you've just bought your first apartment or you've been on a strata committee for years, understanding how levies work is essential to protecting your investment.
What Are Strata Levies?
Strata levies (sometimes called body corporate fees or strata fees) are regular payments made by all lot owners in a strata scheme. These funds cover the cost of maintaining and managing common property — everything from lifts and lobbies to gardens and garbage rooms.
In NSW, levies are set at the Annual General Meeting (AGM) and are typically paid quarterly. The amount each owner pays is proportional to their unit entitlement, which is set when the strata plan is registered.
The Two Funds: Admin vs Capital Works
Every strata scheme in NSW must maintain two separate funds:
Administrative Fund
The admin fund covers day-to-day operating expenses, including:
- Strata management fees
- Insurance premiums
- Cleaning and gardening
- Utility bills for common areas
- Minor repairs and maintenance
Capital Works Fund
The capital works fund (formerly the sinking fund) is for long-term maintenance and major repairs:
- Roof replacements
- Lift refurbishments
- Painting of common areas
- Waterproofing
- Major plumbing or electrical work
A healthy building typically allocates 30-40% of total levies to the capital works fund. If your building is putting less than 20% into capital works, that's a red flag.
How to Read Your Levy Notice
Your quarterly levy notice should break down exactly how much goes to each fund. Here's what to look for:
| Item | What It Means |
|---|---|
| Admin Fund Contribution | Your share of operating costs |
| Capital Works Contribution | Your share of long-term reserves |
| Special Levy (if applicable) | One-off charge for unexpected costs |
| Unit Entitlement | Your ownership share (determines your proportion) |
What Makes Levies Go Up?
Several factors can cause levy increases:
- Insurance premium rises — Strata insurance has increased dramatically across Australia, particularly for buildings with cladding issues
- Ageing infrastructure — Older buildings need more maintenance
- Deferred maintenance — Buildings that have historically under-funded capital works often face steep increases
- Inflation — General cost increases in labour and materials
- New legislation — Compliance requirements can add costs
Red Flags to Watch For
As an owner, keep an eye out for these warning signs:
- Levies haven't increased in years — This usually means maintenance is being deferred
- Capital works fund is below the 10-year plan requirements — Compare your fund balance to the capital works plan
- Frequent special levies — This suggests poor financial planning
- No capital works fund plan — Every scheme should have a current 10-year plan
How UnitBuddy Can Help
UnitBuddy's benchmarking tools let you compare your building's levy structure against similar buildings in your area. You can instantly see whether your admin-to-capital split is healthy, whether your insurance costs are in line with peers, and where you might be over or under-spending.
Understanding your strata levies is the first step to being an informed owner. If something doesn't look right, don't be afraid to ask questions at your next AGM — it's your money, and you have every right to know where it's going.