Strata Levies Explained — Admin Fund and Capital Works Fund (Australia 2026)
Strata levies are compulsory contributions that all lot owners pay to fund the management of the strata scheme. They are split into two main funds — the administrative fund (day-to-day expenses) and the capital works fund (future major works). Understanding levies before you buy is critical — they are an ongoing ownership cost.
The Two Main Levy Funds
Administrative Fund (Admin Fund)
The admin fund covers the day-to-day operating costs of the strata scheme. Contributions are set annually by the owners corporation based on the expected annual budget.
Typical admin fund expenses:
| Expense | Description |
|---|---|
| Building insurance | Mandatory; covers common property and structure |
| Strata management fees | Professional strata manager’s fees |
| Common area maintenance | Garden maintenance, cleaning, pest control |
| Utilities (common areas) | Electricity for lifts, lighting, pumps |
| Minor repairs | Small repairs to common property |
| Strata committee expenses | Miscellaneous operational costs |
| Accounting and auditing | Financial reporting obligations |
Capital Works Fund (Sinking Fund)
The capital works fund accumulates savings for major future expenditure — items that are expected to be replaced or repaired at intervals over the building’s life.
Typical capital works fund expenditure:
| Item | Replacement interval | Rough cost per building |
|---|---|---|
| Roof replacement | 20–40 years | $50,000–$300,000+ |
| Lift overhaul or replacement | 15–25 years | $80,000–$250,000+ |
| Pool resurfacing | 10–20 years | $20,000–$60,000 |
| Painting (external) | 7–15 years | $20,000–$150,000+ |
| Car park resurfacing | 15–25 years | $30,000–$150,000+ |
| Balcony waterproofing | 10–20 years | $10,000–$100,000+ |
| Fire system upgrades | Ongoing | Variable |
State legislation requires owners corporations to prepare a capital works fund plan — a 10-year (or longer) forecast of expected major expenses and the contributions needed to fund them.
How Levy Amounts Are Set
Step 1: The owners corporation prepares an annual budget estimating admin fund costs. Step 2: The capital works fund plan sets the target annual contribution. Step 3: Total levy requirement is divided among lots based on unit entitlement (each lot’s proportionate share). Step 4: The levy is typically paid quarterly.
Formula for individual lot levy:
$$\text{Quarterly levy} = \frac{\text{Lot unit entitlement}}{\text{Total unit entitlement}} \times \text{Total annual levy requirement} \div 4$$
What Are Normal Levy Levels?
Levies vary enormously by scheme type and age:
| Building type | Typical total annual levy range |
|---|---|
| Small walk-up apartment block (6–12 lots, no lifts) | $2,000–$5,000/year per lot |
| Medium-rise apartment (10–30 lots, basic facilities) | $3,000–$8,000/year per lot |
| High-rise apartment (50+ lots, lifts, pool, gym) | $8,000–$20,000+/year per lot |
| New build (defects likely; low initial levies) | $2,500–$6,000/year per lot (may increase) |
| Old building in need of significant maintenance | Can be $10,000–$25,000+/year |
Red Flags in Levy Assessment
Very low levies: New estate developers sometimes set artificially low levies to make properties attractive to buyers. After the defect liability period and as the building ages, levies may increase significantly or a special levy may be struck.
Low capital works fund balance: An old building with a low capital works fund balance has deferred saving — a special levy is more likely.
Admin fund deficit: If the admin fund frequently runs in deficit, the scheme is not covering its operating costs — either levies are too low or spending is too high.
Rapidly increasing levies: A pattern of levy increases each year (beyond CPI) may indicate a scheme with cost pressure — rising insurance premiums, maintenance issues, or reactive rather than planned maintenance.
Comparing Levies When Buying
When comparing apartments, factor in the total annual levy cost as part of the ongoing ownership cost — alongside mortgage repayments, council rates, and water rates.
Levy normalisation: Compare levies on a per-square-metre or per-entitlement basis when comparing different-sized lots in the same building. A 3-bedroom apartment with a higher entitlement will have higher levies than a 1-bedroom unit in the same scheme.
Frequently Asked Questions
Can I refuse to pay levies if I disagree with the decision?
No — levies are legally enforceable. An owner in arrears can be subject to interest charges and recovery action. Non-payment of levies does not affect your obligations.
What happens if levies are not enough to cover expenses?
The owners corporation can raise a special levy to cover the shortfall, borrow money (in some states), or reduce expenditure. Running a consistent deficit is a sign of poor financial management.
Are strata levies tax-deductible?
For owner-occupied properties: no. For investment properties where the lot is available for rent, strata levies (admin fund portion relating to the current financial year) may be deductible. The capital works fund contribution is generally not immediately deductible — it may form part of the building write-off available to the new owner after purchase. Consult a registered tax agent.
Related Strata Guides
- Special Levies — What Happens When Strata Raises a Special Levy
- Owners Corporation Fees — What Do They Cover?
- What Is Strata Title? A Complete Guide
- Strata Title Australia Hub
This article provides general information about strata levies in Australia. Levy amounts and fund structures vary by scheme and state legislation. For advice on a specific strata scheme, review the strata records or speak with a licensed strata manager. Find one through MoneySmart.