Strata levies are regular fees paid by the owners of apartments, units, townhouses, and other strata-titled properties to cover the cost of maintaining common areas and running the body corporate (also called the owners corporation). If you own a unit or apartment as an investment property, you will pay strata levies in addition to your other property costs.
These levies fund the day-to-day upkeep of shared spaces (lobbies, lifts, gardens, driveways, car parks, pools, and gyms) as well as building insurance, administrative costs, and a sinking fund for major future repairs.
How Strata Levies Are Calculated
Levies are typically set annually by the body corporate at its annual general meeting, based on a budget for the coming year. Your share is usually based on your lot's "unit entitlement," a number assigned to each lot that reflects its relative value within the strata scheme. Larger or better-positioned units typically have higher entitlements and therefore pay more.
Levies are usually paid quarterly, though some schemes bill monthly or annually.
What Levies Cover
Strata levies are generally split into two funds:
- Administrative (or operating) fund: covers routine costs like gardening, cleaning, lift maintenance, building insurance, and management fees
- Capital works (or sinking) fund: a reserve for major repairs and maintenance, such as roof replacement, painting the exterior, or waterproofing. This fund builds up over time so that large expenses can be covered without special one-off levies
Special Levies
If the sinking fund does not have enough money to cover an unexpected major expense, such as emergency structural repairs, the body corporate may impose a special levy. This is an additional one-off payment on top of regular levies, and it can be substantial.
Why It Matters for Landlords
Strata levies are a significant ongoing cost for apartment and unit investors, often running into several thousand dollars per year. They directly affect your cash flow and net yield. Before buying a strata property, review the body corporate records to understand the current levy amounts, the sinking fund balance, and any planned special levies.
Strata levies are a tax-deductible expense for investment properties. propkt tracks strata levies as part of your property expenses, so they are included in your yield calculations and tax-time summaries automatically.