If you have ever opened a strata levy notice and wondered where exactly all that money is going, you are not alone. Strata fees can cover everything from building insurance and cleaning to long-term repairs that may not happen for years.
In NSW, the legislation generally calls these payments levies, although “strata fees” is the term many owners use. This guide explains what strata fees cover, how they are calculated, what is normal for Sydney buildings, and what has changed under the recent NSW strata reforms.
The important point is that your strata fees are not simply a charge for having a strata manager. They are the way your Owners Corporation collects the money needed to run, maintain and plan for the future of the building.
Strata fees are regular payments made by lot owners to the Owners Corporation to cover the costs of running and maintaining the strata scheme. In NSW, these payments are usually called strata levies or contributions.
The Owners Corporation approves the scheme's budget and levy contributions at its Annual General Meeting. The strata manager does not simply decide what each owner will pay.
Your levies are normally paid quarterly, although the Owners Corporation can determine the payment frequency. You should receive a levy notice before each payment is due.
The amount on your notice depends on the budget for the scheme and your lot's unit entitlement. That means two apartments in the same building can have different strata fees even though they share the same common property.
Your strata fees can pay for the everyday costs of running the building as well as longer-term maintenance and major works.
The money is generally divided between the administrative fund and the capital works fund. A special levy can also be raised when an unexpected or significant expense cannot reasonably be covered by the existing funds.
| Fund | What it generally pays for | What to expect | ||
| Administrative fund | Day-to-day maintenance, insurance, cleaning, utilities, management and other regular expenses | Ongoing costs | ||
| Capital works fund | Major repairs, replacement and long-term building works | Planned over a longer period | ||
| Special levy | Significant or unexpected costs that cannot be covered by existing funds | Additional contribution when required |
The capital works fund was previously commonly referred to as a sinking fund. The terminology has changed, but the basic idea is familiar: money is set aside for larger expenses that are not part of the building's normal day-to-day running costs.
Your administrative fund can cover things such as common property maintenance, building insurance, electricity for shared areas, gardening and cleaning. The capital works fund may eventually pay for projects such as repainting, replacing roofing, major waterproofing works or upgrading shared building infrastructure.
The NSW Government also requires schemes to consider the goals and expenses in their 10-year capital works fund plan when preparing their annual budget.
For more information about one of the largest recurring costs in the administrative fund, see our guide to strata insurance renewals.
Your strata fees are generally calculated according to your lot's unit entitlement.
Unit entitlement is a number assigned to each lot in the strata plan. It is used for several purposes, including determining each owner's share of the contributions raised for the Owners Corporation.
A simple example makes this easier to understand.
Imagine your scheme needs to collect $200,000 over the financial year. Your lot has a unit entitlement of 40 out of a total 1,000.
Your share would be:
40 ÷ 1,000 × $200,000 = $8,000 per year
If the levies were paid quarterly, that would work out at $2,000 per quarter.
The actual calculation for a scheme can be more complicated, and administrative and capital works contributions can be treated differently depending on the circumstances. The important point is that your levy is not simply based on the market value of your apartment or the amount of money the strata manager charges.
There is no single “normal” strata fee for a Sydney apartment.
Two buildings with apartments of a similar size can have very different levies because the cost of running a strata scheme depends heavily on the building itself.
A building with lifts, a basement car park, a swimming pool, gym, extensive gardens or other shared facilities will generally have more ongoing costs than a smaller walk-up building.
Building age also matters. An older building may have higher capital works requirements, particularly if major repairs or replacement projects are approaching.
The condition of the building is another important factor. Unresolved defects, ageing infrastructure or significant maintenance requirements can affect both current expenditure and future capital works planning.
This is why comparing your strata fees with a friend's apartment or another building down the road does not necessarily tell you whether your levies are high or reasonable.
A better question is: what is your building getting for the money it collects?
If the budget is funding necessary maintenance, insurance and a realistic long-term capital works plan, a higher levy may simply reflect the cost of maintaining a more complex or ageing building.
Recent NSW strata reforms have changed several aspects of how levies are planned, communicated and managed.
The changes were introduced in stages rather than through one single reform.
From 1 July 2025, Owners Corporations must consider sustainability infrastructure when preparing their capital works fund estimates.
The reforms also extended the period in which an owner can bring a claim relating to an Owners Corporation's failure to maintain common property from two years to six years.
From 27 October 2025, every strata levy notice must include a Financial Hardship Information Statement, or the relevant information from that statement.
The purpose is straightforward. If an owner is struggling to pay, the levy notice should make them aware that support and payment options may be available rather than allowing the debt to continue building unnoticed.
The reforms also introduced a standard form for owners requesting payment plans for overdue levies. Owners can request a payment plan through the prescribed process, while continuing to meet their ongoing levy obligations.
For more detail about the financial hardship and payment changes, see our article on the NSW strata law changes that came into effect on 27 October 2025.
The latest tranche introduced a standard form for 10-year capital works fund plans.
Importantly, this does not mean every existing strata scheme has to throw away its current plan and start again. Existing plans can remain in place until they are reviewed, revised or replaced. When a new or updated plan is prepared, however, it must use the standard form.
The NSW Government recommends reviewing a capital works fund plan annually to support better budgeting and levy planning, while the legislation requires the plan to be reviewed at least every five years.
This makes the capital works fund an increasingly important part of understanding why your strata fees may change from year to year.
For a closer look at the latest requirements, see our guide to the April 2026 NSW strata reforms and capital works plans.
A special levy is an additional contribution raised by an Owners Corporation when a significant expense cannot reasonably be covered by the scheme's existing funds.
It might be needed for an unexpected repair, major building work or another expense that was not adequately provided for in the existing budget or capital works plan.
A special levy is not simply something a strata manager can impose on owners. The Owners Corporation needs to follow the relevant meeting and voting requirements before a special levy can be raised.
If your scheme regularly needs special levies, it is worth asking why. Sometimes unexpected problems are genuinely unavoidable. In other cases, recurring special levies can indicate that the scheme's ordinary budget or long-term capital works planning needs closer attention.
If you are having trouble paying your strata fees, the worst option is usually to ignore the notices and hope the problem disappears.
Overdue levies can attract interest and, eventually, debt recovery action. NSW rules also provide a process for owners experiencing financial hardship to request a payment plan.
The NSW Government advises owners to approach their Owners Corporation or strata manager as soon as possible. A payment plan deals with overdue levies, but you must generally continue paying new levies as they become due.
The 2025 reforms also introduced a requirement for levy notices to provide financial hardship information. This includes information about available support and the National Debt Helpline.
If you are struggling, raising the issue early gives the Owners Corporation more opportunity to work through the available options before the situation becomes more expensive.
Sometimes, but there is no magic percentage that every scheme can cut from its levies.
The first step is understanding what is actually driving the budget. Insurance, utilities, maintenance, cleaning, management costs and long-term capital works can all contribute to the amount owners pay.
Cutting necessary maintenance simply to make the next levy notice look better can create a much bigger problem later. A better approach is to look for unnecessary expenditure, compare major contracts where appropriate and make sure the capital works plan reflects the actual condition of the building.
For more practical ideas, see our guide on how to reduce strata levies.
Usually, no. Council rates are generally the responsibility of the individual lot owner rather than an expense covered by the strata levy. However, the Owners Corporation can have its own council-related expenses as part of the scheme's broader operating costs. Check your individual council rates notice and strata budget if you are unsure.
It depends on how the property is used. If you own an investment property, some strata expenses may be deductible, while private owner-occupiers generally cannot claim strata levies simply because they own a strata property. Tax treatment can vary, so speak to a qualified tax adviser about your circumstances.
Strata levies are the responsibility of the lot owner, not the tenant. A tenant may contribute to certain property expenses under their tenancy arrangement, but they are not responsible for paying the Owners Corporation's strata levies. If you are renting a strata property, your landlord remains responsible for the levy account.
Strata levies are commonly paid quarterly, although the Owners Corporation determines the payment arrangements for the scheme. Your levy notice should state the amount due and the payment date. Some schemes may allow more frequent payment arrangements, but the full annual contribution still needs to be paid by the required dates.
Ask for the property's strata information and financial records as part of your due diligence. A strata report can help you understand current levies, the financial position of the scheme, upcoming works and whether special levies have been raised or are being considered. Looking only at the current quarterly levy can miss important future costs.
Yes, building insurance is generally paid from the strata scheme's administrative fund. The strata scheme is required to have certain insurance in place, while individual owners are responsible for their own contents and other personal insurance needs. The exact cover should be checked against the scheme's insurance policy.
Strata fees are the contributions owners make to the Owners Corporation to fund the operation and maintenance of the scheme. Strata management fees are one particular expense that may be paid from the administrative fund. In other words, the strata management fee is one cost within the broader strata budget, not the same thing as your total levy.
Your strata fees may increase because the scheme's costs have increased, because planned capital works are approaching, because insurance or other contracts have become more expensive, or because previous contributions were not sufficient. A levy increase is not automatically a sign that something has gone wrong. The budget and capital works plan should show where the money is expected to go.
If your strata fees seem high, start with the budget rather than the amount printed on the levy notice.
Look at what the administrative fund is spending, what is being set aside for capital works and whether there are major projects approaching. Check whether the scheme has a current 10-year capital works fund plan and whether the planned expenditure matches the building's actual condition.
Your levy is ultimately there to fund the costs of owning property within the scheme. The useful question is not simply whether the number is high. It is whether the Owners Corporation has a sensible reason for collecting it.
If your levies keep increasing and nobody can explain why, that is worth asking about. Sometimes the problem is not the amount being collected, but the lack of a clear plan behind it.
If you want to discuss how your scheme's finances are being managed, our Sydney strata management team can help you understand what is driving your current budget and where your levy contributions are going.