Strata Finance & Levies in Australia: The Complete Committee Guide (2026)

Strata Finance & Levies in Australia: The Complete Committee Guide

Strata finance is the single most important, and least understood, part of apartment living in Australia. The decisions made at one annual meeting can shape what owners pay for the next ten years. The numbers on a quarterly levy notice are the surface; underneath sit insurance markets, construction inflation, asset lifecycles, contracts that run for decades, and reform timelines that vary by state.

This guide is the complete reference for anyone who needs to understand where the money goes: committee members, treasurers, lot owners, building managers, and buyers doing due diligence. It is written for the people whose money is at stake, not for the strata managers who administer the scheme.

It pulls together everything UnitBuddy has published on strata finance into one place, with the state-by-state differences laid out properly, and links into the deep-dive articles when you want to go further.

How to use this guide

Skim the table of contents and click into the sections that matter to you right now. Each section gives you the working understanding you need, then points to the dedicated article for the full breakdown. Bookmark this page and come back to it before AGMs, before levy increases, before insurance renewals, and before voting on capital works.

If you would rather see your own building's numbers laid out the same way (fund balances, levy history, capital works forecasts, insurance trends), that is what UnitBuddy is for. Take a look once you have read what your building should look like in good shape.

Table of contents

1. How strata levies actually work
2. The two funds: administrative vs capital works
3. The 10-year capital works plan
4. Strata insurance: what is covered, what is not
5. Hidden costs and management fees
6. Reading and questioning the numbers
7. State-by-state quick reference
8. Tools and templates for committees

How strata levies actually work

A strata levy is the contribution every lot owner pays to fund the running and long-term upkeep of the building. Unlike a tax or a utility bill, it is set by the owners themselves at a general meeting, based on a budget the committee proposes. The amount each lot pays is determined by its unit entitlement (NSW), lot entitlement (Victoria), or equivalent share: a number set when the scheme was registered, generally proportional to the original value or size of each lot.

The structure is uniform across Australia even though the terminology varies:

• A budget is prepared for the next 12 months
• That budget is split between two funds (operating costs and long-term reserves)
• Owners vote to approve the budget at the AGM
• The total is divided by unit entitlement and billed quarterly (in most states)

What makes strata levies different from any other household bill is that owners can challenge them, change them, and refuse to approve them. A budget proposed by a strata manager is not a given; it is a proposal. Treating it as a fixed cost is one of the most expensive mistakes an owner can make.

For the full mechanics of what appears on a levy notice (line items, GST treatment, special levies, recovery action), see our deep-dive guide:

Levies have been rising sharply across Australia. Insurance pressure, construction inflation, and the long tail of underfunded capital works plans have combined to push levies up 20–30% in many buildings since 2022. This is not random; it is the predictable result of years of underbudgeting catching up with reality.

The two funds: administrative vs capital works

Every strata budget is split into two funds. The names differ by state, but the logic is identical:

The operating fund pays for predictable, recurring costs: insurance premiums, electricity for common areas, cleaning, gardening, the strata manager's fee, lift servicing, fire safety inspections, pest control. These are the bills that arrive every quarter regardless of what is happening in the building.

The long-term fund is where the building saves up for capital expenditure that comes around every few years to a few decades: repainting, lift replacement, roof renewal, façade work, common-area carpet, and the rest of the long maintenance cycle. The principle is that current owners contribute to the cost of replacing assets they are using, so future owners are not handed an unfair bill.

The split between the two funds matters more than most owners realise. A building that runs an oversized administrative fund and a starved capital works fund is quietly setting up its future owners for special levies: sudden, large, irregular contributions when something major needs replacing and the long-term fund cannot cover it.

If you are looking at your own building's funds and trying to work out whether the balances are healthy, this is exactly the kind of analysis UnitBuddy automates (fund trajectory, contribution adequacy, projected shortfalls) without you needing to build a spreadsheet from scratch. See how it works.

The 10-year capital works plan

The capital works plan is the document that tells you whether your building's long-term fund is being run responsibly. It lists every major item of work the building expects to undertake over the next ten years, when each one is expected to occur, what it will cost, and how the long-term fund needs to be contributing each year to be ready for it.

Every state requires one in some form, but the rigour varies sharply:

• NSW: From 1 April 2026, schemes must use the standard form when preparing, revising, or replacing their capital works plan. This is one of the most significant strata reforms in a decade and is forcing many buildings to discover that their existing plans were inadequate.
• VIC: Owners corporations of more than 100 lots, or with annual fees above a threshold, must have a maintenance plan. Tiers 2 and 3 schemes have stricter requirements.
• QLD: A sinking fund forecast covering at least nine years is required for most schemes.
• WA: A 10-year plan is mandatory for schemes of 10 or more lots, with the transition period now closing.
• SA, TAS, ACT, NT: Requirements range from formal multi-year plans to looser obligations to "adequately maintain" common property.

The April 2026 NSW deadline is the single most consequential strata-finance event of the year. Buildings that have been coasting on outdated or generic plans are now required to commission proper engineering-grounded forecasts.

For new buildings, the developer's initial plan and initial levy estimates are particularly important, and increasingly scrutinised under the 2026 NSW handover reforms.

UnitBuddy includes a capital works plan builder, a waterfall view of how the long-term fund moves over the next decade, and a "what if" scenario modeller for testing inflation, deferral, and special levy assumptions. See the capital works tools.

Strata insurance: what is covered, what is not

Strata insurance is mandatory in every Australian state and territory. The owners corporation must hold a policy covering at least the building (replacement value), public liability, and certain workers compensation exposures. What that policy actually covers, and where the gap to your contents insurance sits, is the source of more disputes and more financial surprises than almost any other strata topic.

The headline numbers tell the story: strata insurance premiums have risen 40–80% in many buildings since 2022. Reinsurance markets, water damage claims, cladding-affected risk pools, and natural disaster exposure are all pushing premiums up faster than levies can absorb them.

The state-by-state coverage rules differ in technical ways that matter:

• NSW, VIC, ACT: Strata insurance covers the building including original fixtures and fittings as installed at registration. Owner-installed upgrades may or may not be covered depending on the policy.
• QLD: The Body Corporate and Community Management Act sets specific minimum coverage for building, public liability, and office bearer's liability.
• WA: Schemes registered under the Strata Titles Act must hold building insurance with similar minimum scope.
• SA, TAS, NT: Coverage requirements are set by their respective strata Acts; minimums broadly align with the eastern states but interpretation varies.

The gap between strata cover and personal cover is where most owners are exposed. Carpet, blinds, appliances, internal wall finishes upgraded since registration, and almost everything you would think of as "yours" usually sit on the owner's side of the line: uninsured unless you hold a contents policy that explicitly extends to fixtures and improvements.

The other half of the insurance conversation is commissions and disbursements: the structural arrangements between strata managers, brokers, and insurers that can quietly inflate the real cost of cover. The 2024 ABC Four Corners investigation made this national news, and the 2025 NSW reforms have started to tighten disclosure obligations.

Hidden costs and management fees

The headline strata management fee is rarely the real cost. Australian strata management contracts typically structure their fees across multiple schedules:

• Schedule A: the base management fee, which is what most owners think is the total cost
• Schedule B: additional services billed per task or per hour (often the largest hidden cost driver)
• Schedule C: insurance commissions and brokerage arrangements
• Schedule D: disbursements such as printing, postage, document retrieval, archive fees
• Schedule E and F: variable depending on the contract; often where new fees appear over time

A building paying a $5,000 base management fee can easily be paying $30,000–$50,000 once Schedule B activity, insurance commissions, and disbursements are added. None of this is illegal, but most committees never see the schedules broken out, and many never realise they have the right to.

The reform direction across Australia is clear: more disclosure, more itemisation, and more committee power to challenge unjustified charges. The 2025 NSW reforms gave NCAT new authority to vary or end management agreements; equivalent state-level shifts are following. A committee that audits its strata management arrangements properly, even just once, typically finds 10–25% in recoverable cost.

This is exactly the kind of analysis UnitBuddy is designed to make obvious: committee members can see the breakdown of every fee category over time, compare quotes side-by-side, and surface variances that are not in the headline budget. See the financials view.

Reading and questioning the numbers

Strata finance is only useful if owners actually engage with it. The annual budget approval at the AGM is the single moment where the levies are not yet set, and where committee members and owners have the power to challenge assumptions, ask for justification, and propose changes. After the vote, the levies are set. Before the vote, almost everything is negotiable.

The mechanics of doing this well:

The benchmarking question is the trickiest. There is no single "fair" levy figure for an Australian apartment. The right number depends on building age, lift count, pool, gym, embedded services, common-area scale, jurisdiction, insurance class, and a dozen other factors. The honest methodology is not "compare to industry average"; it is "compare your own building's trajectory against its asset base, capital works obligations, and historical run rate".

For NSW schemes specifically, the new Strata Hub annual reporting requirements are starting to create a public dataset that, over time, will make benchmarking far more reliable.

State-by-state quick reference

The principles of strata finance are the same across Australia. The terminology, mandatory minimums, and reform timelines are not.

New South Wales

Governing law: Strata Schemes Management Act 2015. Funds: Administrative + Capital Works. Capital works plan: 10 years, mandatory standard form from 1 April 2026. Annual reporting: Strata Hub within three months of AGM. Insurance commissions and disbursements: stronger disclosure under 2025 reforms.

Victoria

Governing law: Owners Corporations Act 2006 (currently under review). Funds: Maintenance + Maintenance Plan. Maintenance plan mandatory for tier 1 and 2 schemes (>50 or >100 lots respectively, with fee thresholds). Lot liability and lot entitlement determine voting and contribution shares.

Queensland

Governing law: Body Corporate and Community Management Act 1997. Funds: Administrative + Sinking. Sinking fund forecast required for at least 9 years. Smoke alarm reform creates a 2026 deadline for many buildings.

Western Australia

Governing law: Strata Titles Act 1985 (as amended 2018). Funds: Administrative + Reserve. 10-year plan mandatory for schemes of 10 or more lots; transition period closing in 2026. Short-term rental registration scheme commenced January 2026.

South Australia

Governing law: Strata Titles Act 1988 / Community Titles Act 1996. Funds: Administrative + Sinking. Plan requirements lighter than the eastern states; the obligation is to "adequately maintain" common property, with the fund as the mechanism.

Tasmania

Governing law: Strata Titles Act 1998. Funds: Administrative + Sinking. Smaller scheme average size means many buildings operate without formal long-range plans, though the obligation to maintain common property still applies.

Australian Capital Territory

Governing law: Unit Titles (Management) Act 2011. Funds: Administrative + Sinking. Stronger disclosure requirements than some eastern states; the executive committee has defined statutory duties.

Northern Territory

Governing law: Unit Titles Schemes Act 2009 / Unit Title Act 1975. Funds: Administrative + Sinking. Smallest market, with most schemes managed under the modern Schemes Act framework.

For terminology mapping across all eight jurisdictions when reading documents that originate in another state, see our reference guide:

Tools and templates for committees

Reading about strata finance is the first half. Doing something with it is the second.

UnitBuddy is built specifically for committees and owners, not for strata managers. Every tool below was designed with a committee member in mind: someone unpaid, time-poor, and trying to make sound decisions about a lot of money on the back of incomplete documentation.

• Levy forecaster: model contribution scenarios across the next ten years with inflation, capital expenditure, and special levy assumptions
• Capital works waterfall: see how your long-term fund balance moves year-on-year against the planned expenditure schedule
• "What if" scenario modeller: test the impact of deferring works, raising contributions, or changing assumptions
• Insurance benchmarking: track your premium against the building's claims history and capital works profile
• Building life ledger: the persistent record of every financial, operational, and asset event in the building, accumulating over time so the next committee inherits institutional memory rather than starting from scratch

Explore the tools · See pricing by building size · Get started

Frequently asked questions

What is the difference between a special levy and a regular levy?

A regular levy is the quarterly contribution set by the approved annual budget. A special levy is an additional, one-off contribution raised to cover an unbudgeted cost, usually a major capital expense the long-term fund cannot cover. Special levies require a general meeting resolution and are a strong signal that the long-term fund has been underfunded historically.

Can owners refuse to pay a levy they think is unfair?

No. Once a levy is approved by general meeting, it is legally enforceable, and unpaid levies attract interest and recovery costs. The time to challenge a levy is before the budget is approved, at the AGM. After approval, the only remaining recourse is a tribunal application on specific grounds.

How much should a building have in its capital works fund?

There is no universal answer. The right balance depends on the building's age, asset profile, and the next 10 years of planned works. A useful working test: at any point in the 10-year plan, the fund should be projected to remain in positive balance without requiring a special levy. If your plan shows a year where the fund goes negative, the contribution rate is too low.

What is the difference between unit entitlement and floor area?

Unit entitlement is the share of the scheme assigned to each lot, set at registration. It is usually but not always proportional to floor area; some schemes weight by original sale value, harbour views, or other factors. Levies, voting rights, and insurance proceeds are all distributed by unit entitlement, not by floor area.

Are strata managers required to disclose insurance commissions?

Increasingly, yes. The 2025 NSW reforms tightened disclosure obligations significantly, and equivalent reforms are following in other states. A strata manager who declines to disclose commission arrangements when asked directly is operating outside contemporary regulatory expectations even if not yet outside the letter of the law in every jurisdiction.

Keep reading

This guide is one of seven pillar resources on UnitBuddy:

• Strata Finance & Levies ← you are here
• Committee Governance
• Strata Disputes & Enforcement
• Strata Living
• NSW Strata Reform Timeline
• Buying & Selling in Strata
• Sustainable Strata Buildings

Or browse the full blog for everything we have published.

Last updated: 5 May 2026. UnitBuddy publishes general information for Australian strata owners and committees. It is not legal, financial, or accounting advice. For advice specific to your scheme, consult a strata lawyer, strata accountant, or your owners corporation's professional advisers.