Understanding Strata Levies and Special Levies in NSW

At Premium Strata, we believe owners should always understand where their money goes.

Strata levies fund the day-to-day running and long-term maintenance of your building, from cleaning, insurance and utilities through to major repairs and replacements. Special levies, by contrast, are one-off contributions raised when existing funds are not enough.

This guide explains how strata levies and special levies work in NSW, who decides them, what notice is required, and how strata management fees fit into the overall budget.

Quick Summary

• Strata levies are owner contributions that fund the scheme’s administrative and capital works budgets. They are approved at the Annual General Meeting or AGM and issued quarterly, based on unit entitlement.
• Special levies are additional contributions approved at a general meeting to cover unexpected costs or expenses not allowed for in the approved budget.
• Notice and timing: standard and special levies generally require at least 30 days’ written notice. Levies raised to meet urgent funding needs, such as emergency repairs, may be set with shorter notice periods under the legislation.
• Payment support: owners experiencing financial hardship may request a payment plan under updated NSW guidance. Specific criteria apply.
• Strata management fees are paid from the administrative fund and appear as a line item in the approved budget. Levies do not go directly to the strata manager, but are collected to cover all scheme expenses, including strata management services.

Watch: How to Read Your Strata Levy Notice

What Do Strata Levies Pay For?

Levies fund the scheme’s two main accounts:

Administrative Fund

Covers day-to-day expenses such as cleaning, gardening, insurance, utilities, compliance costs and strata management fees.

Capital Works Fund

Pays for longer-term or major expenses and replacements, including roof works, painting, waterproofing, lift upgrades and other capital items.

Every NSW strata scheme must have a 10-year capital works fund plan. This plan should be reviewed annually and formally updated at least every five years. Its purpose is to anticipate future costs and reduce the risk of sudden special levies.

Tip: Before buying an apartment, arrange a strata records inspection. Review the levy history, current budget and capital works plan to assess whether the scheme is adequately funded or under-budgeted.

Who Decides the Amount?

Strata levies are not set by the strata manager.

At the AGM, the strata managing agent, together with the committee, presents a proposed budget for both the administrative and capital works funds. Owners then vote by ordinary resolution to approve that budget and the associated levies.

Once approved, levy notices must be issued in writing in accordance with the Strata Schemes Management Act 2015.

What Is a Special Levy?

A special levy is an additional contribution raised when the scheme faces unexpected costs or expenses that were not allowed for in the approved budget.

Common examples include:

• urgent waterproofing or structural repairs
• fire safety upgrades
• insurance excesses or premium increases
• cost overruns on approved capital works

Special levies are approved by the owners corporation at a general meeting and are calculated according to unit entitlement for each lot.

When approving a special levy, the resolution must clearly state:

• the purpose of the levy
• the total amount to be raised
• how and when it is payable (for example, one instalment or multiple instalments)

Funds raised by a special levy can only be used for that approved purpose unless a further resolution authorises otherwise.

Can a Strata Manager Raise a Special Levy?

In almost every case, no.

A strata manager cannot independently raise a special levy. Only the owners corporation, at a general meeting, can approve one.

The exception is where a strata manager has been appointed by the NSW Civil and Administrative Tribunal (NCAT) as a compulsory managing agent, in which case they act in place of the owners corporation and exercise its functions.

How Much Notice Will I Get?

The legislation sets minimum notice periods:

• Standard or special levies: at least 30 days’ written notice before payment is due
• Urgent repair levies: at least 14 days’ notice where the expense relates to health or safety risks

Levy notices must clearly explain what the funds are for and when payment is required.

What Happens If Strata Levies Aren’t Paid?

Updated under NSW reforms effective 27 October 2025.

From 27 October 2025, levy notices must include a Financial Hardship Information Statement, advising owners of their right to request a payment plan. Any payment plan must follow the standard template issued by NSW Fair Trading.

While owners corporations may refuse a payment plan in limited and specific circumstances, they must otherwise act reasonably when a genuine request is made.

If levies remain unpaid and no payment plan is in place, the owners corporation may apply to recover the unpaid amounts. This can include:

• seeking interest of up to 10% per annum (if approved), and
• recovering legal and debt recovery costs through NCAT or the courts.

Importantly, interest and recovery costs cannot be recorded on the owner’s ledger unless and until they are awarded by NCAT or a court.

Tip: Levy liabilities attach to the lot, not just the individual owner. Outgoing and incoming owners are jointly and severally liable for unpaid levies. For this reason, a Section 184 certificate is obtained before settlement so that levy adjustments can be made and outstanding amounts are appropriately cleared at settlement.

How Do Strata Management Fees Fit In?

Strata management fees are paid from the administrative fund as part of the annual budget approved at the AGM.

While some owners assume most of their levy goes to the strata manager, in reality management fees usually represent only a small percentage of the total budget. The majority funds general operations, insurance, maintenance and capital repairs.

A key part of the strata manager’s role is to maintain accurate financial records and collect levies on behalf of the owners corporation. However, levy payments are deposited into the scheme’s administrative and capital works fund trust accounts, which are held on behalf of the owners corporation, not paid directly to the manager.

At Premium Strata, transparency is non-negotiable. Our model eliminates most Schedule B fees, with nearly all routine services included within the agreed annual fee.

Linking Strata Levies to Long-Term Planning

Recent strata reforms reinforce the importance of sustainable long-term funding.

While capital works plans must be updated at least every five years, schemes are encouraged to review them annually and adjust levy contributions as needed.

A realistic, well-funded plan reduces the likelihood of special levies and avoids large, sudden financial demands on owners. Spreading contributions over time is far less disruptive than unexpected lump sums.

Tip: If your scheme relies on frequent special levies, it may be time to review whether your capital works fund is adequately funded. Premium Strata supports owners corporations with long-term budget modelling to reduce surprises and protect asset value.

Contact us today

Be confident about your next strata levy with our all-inclusive, capped Diamond-Class service.

At Premium Strata, being accessible when you need us is not a slogan, it is a standard. Our Diamond-Class Service is a genuine commitment to responsive communication, transparent financial management and proactive support for your scheme.

This article is provided for general information only and does not constitute legal or professional advice.
You should seek independent advice specific to your circumstances before making any decisions.