Strata levies are the contributions owners pay to fund the running and maintenance of their building. Understanding why levies exist, how they are calculated and what happens when they are unpaid is essential for anyone living in or buying into a strata scheme. The answers below summarise the law under the Strata Schemes Management Act 2015 and the Strata Schemes Legislation Amendment Act 2025 as well as recent changes to payment plans and debt recovery.
Strata levies are monetary contributions decided by the owners corporation at the AGM to cover the scheme’s expenses. Levies fund two main accounts: (a) the administrative fund, which pays for day‑to‑day expenses like insurance, cleaning, electricity and management fees; and (b) the capital works fund, which pays for major repairs and future capital works. Healthy buildings typically allocate about 30–40 % of total levies to the capital works fund. Owners may also approve a special levy for unexpected costs.
Levies are not set by the strata manager; they are approved by the owners at the AGM. The strata committee (often with the manager’s assistance) prepares a draft budget outlining expected administrative and capital works costs. The budget and proposed contributions are circulated with the AGM notice, and owners discuss and vote on the budget at the meeting.
Once approved, levies are apportioned to each lot in proportion to its unit entitlement, a number reflecting each lot’s share of ownership. Levies are usually payable quarterly, though the owners corporation can set other intervals.
Under section 85 of the Strata Schemes Management Act 2015, unpaid contributions accrue simple interest at 10 % per annum unless the owners corporation resolves otherwise. Interest is not payable if the contribution is paid within one month after it becomes due. The owners corporation may agree to a payment plan and may waive interest. Arrears can be recovered as a debt through the courts, and the defaulting owner may have to pay the corporation’s recovery costs.
From 27 October 2025, the Strata Schemes Legislation Amendment Act 2025 changes the rules around levies:
These changes encourage owners corporations to offer flexible payment arrangements and reduce legal disputes.
Levies can increase due to rising insurance premiums, ageing infrastructure, deferred maintenance, inflation and new legal requirements. Legislative changes (such as mandatory 10‑year capital works plans and new accessibility/sustainability infrastructure) may also require additional funds. Attending your AGM and reviewing the budget helps you understand and influence levy decisions. You can also propose motions to adjust spending or request detailed breakdowns from the strata committee.
Owners may object to levies at the AGM before they are passed. Once levies are approved, owners must pay; failure to do so may result in recovery action. However, under the new legislation, owners can negotiate payment plans and request the owners corporation reconsider budgets at a general meeting. If you believe levies are unreasonable or improperly calculated, you may apply to the NSW Civil and Administrative Tribunal for an order.
The owners corporation may resolve to waive or reduce contributions for specific owners, but doing so is rare and may be challenged by other owners. The owners corporation can resolve not to charge interest on unpaid levies. Waiving contributions entirely could be considered a breach of the duty to act in the best interests of all owners. It’s more common to allow payment plans or defer special levies.