If you own or plan to own an apartment, townhouse, or unit that’s part of a strata scheme, you’ll eventually come face-to-face with the concept of strata levies. They’re not the most exciting part of property ownership, but they’re essential.
Levies keep your building running, your shared spaces livable, and your property’s value intact. But what exactly are strata levies, and how are they calculated?
Let’s break it down in detail so you know exactly what you’re dealing with.
What Are Strata Levies?
At their core, strata levies are the regular contributions every owner in a strata scheme must pay. Since you share facilities, including hallways, gardens, lifts, roofs, and parking lots, it only makes sense that you also share the costs of maintaining them.
Think of it this way: if you lived in a house, you’d be solely responsible for mowing the lawn, fixing the roof, or repairing broken pipes. In strata, that responsibility is spread across all the owners, and levies are how the money gets pooled together to pay for those expenses.
Why Do Strata Levies Exist?
Strata living is all about shared responsibility. The owners’ corporation (sometimes called a body corporate) is legally obligated to manage, maintain, and insure the property’s common areas. But none of that comes for free.
Levies ensure there’s always money in the bank to cover both everyday running costs and unexpected surprises. Imagine something needs fixing or replacing in the building, and you have no funds to facilitate that.
Without levies, your building would quickly fall into disrepair; hallways would stay dirty, lifts would stop working, roofs would leak, and property values would plummet. In other words, levies are the glue holding the entire scheme together.
Types of Strata Levies
Strata levies aren’t a single catch-all fee. Instead, they’re divided into three main categories, each serving a different purpose.
1. Administrative Fund Levies
This fund covers day-to-day expenses and ongoing operational costs. Examples include cleaning services for common areas, gardening and landscaping, and minor repairs.
2. Capital Works (Sinking) Fund Levies
Think of this fund as the building’s long-term savings account. These levies are collected to fund big-ticket repairs and upgrades that don’t happen every day but are inevitable over time. Examples include roof placements and major painting work.
3. Special Levies
Special levies are raised when unexpected or urgent costs arise that aren’t covered by the existing funds. For example, emergency waterproofing due to flooding or unexpected structural issues.
These levies are usually one-off payments.
How Are Strata Levies Calculated?
This part confuses a lot of owners. Strata levies aren’t equal across the board; your share depends on unit entitlement.
Unit entitlement is like your slice of the strata pie. It’s determined by the size, location, and value of your lot compared to others in the scheme. Bigger or more valuable lots usually pay a larger share of the levies.
The actual amount you’ll pay is set at the annual general meeting (AGM), where owners review budgets and vote on levy contributions for the coming year.
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