In any strata environment, lot owners are required to pay levies. The amount will generally differ between properties, but all levies are used in much the same way. Strata managers in Sydney have a responsibility to maintain facilities and provide services to lot owners – these are the elements that your levies will cover.
How much are strata levies in NSW?
There is no definitive answer to this, as there is no fixed rate that applies across the board. Plus, every strata scheme is different. Generally, the size of the property, the services provided, the age and condition of lots and also the level of facilities provided will all impact the cost of strata levies.
As a guide, you can expect to pay between 0.3% – 1.2% of the property’s value. Bear in mind that not all strata schemes feature numerous communal facilities such as pools and gyms, so levies are on the lower end of the scale in these cases.
Different types of strata levies
Many strata schemes separate their levies into different groups. You may only pay one amount for ease of accounting, however, the managers apportion those levies into different funds. Alternatively, you might be billed for three separate levies. Again, this is up to the individual strata management. Here are the types of levies you might typically encounter.
Administrative fund levies
Your standard administrative fund levies are the most common; it’s highly likely that you’ll be paying these in a strata environment. These levies cover a range of routine maintenance costs for common areas, such as:
- Minor repairs
- General maintenance and upkeep
The administrative levies fund is also used for things such as building insurance and management fees. All lot owners are required to pay these levies, as they relate largely to the common areas that are accessible to everyone.
Capital works levies
While your administrative fund levies cover most of the general running costs, the capital works fund is more like a savings scheme. These funds are used for more costly repairs, including but not limited to:
- Replacing gutters/roofing
- Other significant repairs
While the annual administrative costs are usually quite easy to plan, the capital works fund is a little more complex. Sudden repairs can’t necessarily be predicted, that’s why the owners’ corporation is required to have a 10-year capital fund plan to ensure they are putting enough money aside and have the funds available when the job needs doing.
You may be required to pay special levies if there is an immediate need for urgent works that can’t be covered by the capital works fund. Or alternatively, if there are unbudgeted expenses that arise. While administrative levies and capital works levies are usually set well in advance, special levies produce a different level of complexity. They need to be voted on at a general meeting, and as an ordinary resolution, only a majority vote is required. For example, a building may need major roofing repairs due to unforeseen weather damage. The majority of lot owners would need to vote in favour of these repairs before a special levy could be implemented.
Ultimately, the beauty of living within a strata scheme is you don’t need to worry about individual maintenance and repair issues. Your strata management team should take care of these; however, the money has to come from somewhere. Your levies contribute to making your living conditions as comfortable and pleasant as possible.