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Strata Fees

All strata schemes are required to raise regular strata levies, (usually quarterly) which each owner is required to pay.

The amount of strata levies payable varies from one building to the next. This is mainly due to the maintenance required to common property and the shared facilities.

Common property can comprise of driveways, front gardens, recreational facilities, gym, pool, golf course, meeting rooms, tennis courts and so on.

Strata levies cover the costs of insuring the building, common electricity, water consumption, general cleaning, maintenance and repairs, management fees, etc.

At each Annual General Meeting, the Owners Corporation is required to determine what amounts are to be raised by way of strata levies. The proposed levies must be supported by a budget and presented to all owners.

The amount payable by each owner is based on the unit entitlement of their respective lot. Therefore, the larger the unit entitlement of a lot, the greater the portion of the total levy is to be paid by the owner.

The raising of realistic levies is paramount to the success of each building. When devising the strata levies budget it is important to consider the following:-

1. The budget should take into consideration the historical expenditure of the scheme.  Tip - Review the previous year/s financial reports that were approved at your schemes Annual General Meetings.


2. Prepare an estimate of the future receipts and payments likely to occur in the next year; Tip – Review your maintenance agreements with your trade and service providers.


3. Take into consideration the existing financial position of the scheme; Tip – If there is a deficit from your previous financial year, ensure that the loss is recouped in the new estimate.


4. Rely upon your professional sinking fund forecast when setting your sinking fund estimate; Tip – Engage a professional sinking fund consultant to prepare your sinking fund analysis. Trust the experts.


5. For new schemes, it can be difficult to accurately determine the correct amount to be raised for the strata levies for the first year.  As time passes, there could be all sorts of unexpected expenditure that may arise that were not factored into the original estimate. Unfortunately, this is difficult to avoid.  Tip – The early appointment of a strata managing agent, with years of experience in setting levies for new schemes, will probably be able to provide a more realistic budget from the very start.


6. The other thing to consider with new schemes is that there is often a significant increase in levies from the first to the second year. This is generally due to maintenance and warranty periods expiring. Tip – Make allowances for items that are still covered under warranty in your budget, this will reduce the need for a significant increase in the second year.


7. A common misunderstanding is that the strata levies, are the fees paid to the strata managing agent, for providing its management service to the strata scheme. As detailed above, the levies are, in fact, set by deciding how much money the strata scheme will need in the next year to pay all its bills, including insurance premiums, repairs and maintenance, electricity and the managing agent's fee.

Strata levies are essential for any scheme to survive and pay its running costs. Without levies, buildings would deteriorate and the value of each unit would fall.

If you have any questions that you would like answered, please feel free to contact us and we will respond promptly.