Strata Levies: What You’re Paying For, How They’re Set, and Why They May Go Up

Strata Levies: What You’re Paying For, How They’re Set, and Why They May Go Up

Strata levies are one of the most frequently misunderstood parts of strata living. As a strata owner, you might have asked:

“Why are my levies higher than last year?”
“What am I actually paying for?”
“Is Jamesons setting these amounts?”

The good news is that strata levies are not random and not set by your strata manager. They’re part of an owner-driven budgeting process designed to keep your building running smoothly and your asset protected.

What are strata levies?

Strata levies are mandatory contributions paid by all owners in a building to cover the costs of managing and maintaining common property. These contributions are determined and approved by owners at the Annual General Meeting (AGM) each year—they are not set by the strata manager.

Think of levies as your share of the cost to:

• Insure and maintain the building
• Clean and care for shared areas
• Pay for services like lifts, fire compliance, landscaping, and waste management
• Fund long-term projects (like repainting or roof replacement)

In short: Levies are an investment in your home or investment property, not just another bill.

How and when is the levy amount set?

The process of setting annual strata levies typically begins at the beginning of your building’s financial year, once the previous year’s expenses are known and upcoming needs can be better forecasted.

Unlike personal or business tax years, a strata scheme’s financial year doesn’t always run from 1 July to 30 June. It’s usually based on when the scheme was registered, when the first AGM was held or a by-law adopted by the owners corporation.

Regardless of your building’s financial year, the steps to calculate and approve levies follow the same cycle:

1. Draft Budget Prepared: We prepare a draft budget for your building based on the previous year’s actual expenses, anticipated costs for the upcoming year and any planned maintenance or capital works. This draft is then sent to the strata committee for feedback or adjustments.
2. AGM Notice & Budget Distribution: Once reviewed, the finalised proposed budget is included with the Annual General Meeting (AGM) notice, sent to all owners.
3. AGM Held – Owners Vote on Levies: At the AGM, the proposed budget is presented for discussion where owners can ask questions or seek clarification. A motion is put forward to approve the budget and levy amounts and owners vote (either in person or by proxy). If passed, the levies are adopted for the financial year.
4. Levies Finalised and Issued: Once approved at the AGM, the levy amounts and due dates are confirmed, recorded in the AGM minutes, and issued to all owners via levy notices.

Why it’s so important to attend your AGM (or at least read the minutes)

We often hear from owners who are unsure why their levies have changed. That’s because these decisions, including how much you pay and when, are made by owners at the Annual General Meeting (AGM).

The AGM is your opportunity to understand the proposed budget, ask questions, and vote on how your building’s funds are managed.

If you can’t attend, reading the AGM minutes is the next best thing. They outline exactly what was approved, including levy amounts, payment dates, and any planned works so you can stay informed and avoid unexpected surprises.

Staying across these decisions helps you protect your investment and feel more confident in how your building is being managed.

How are levies calculated?

Levies are calculated based on your building’s annual budget, which is prepared by the strata manager and strata committee. It covers:

• Day-to-day costs (admin fund)
• Future or major works (capital works fund)

Once the total amount is agreed, it’s divided among owners based on unit entitlement, your legal share of ownership in the building, usually determined by your lot size or value.

Levy contributions are commonly paid quarterly, and your payment schedule is included in the AGM minutes and detailed in your levy notice. You can access both at any time via MyPortal.

Why do levies increase?

If you’ve noticed your levies going up, you’re not alone. Several factors contribute to levy increases and understanding them can help you stay ahead:

• Insurance premiums: often the largest cost in a strata scheme, have risen significantly across Australia
• General cost increases: for services like electricity, cleaning, and waste management due to inflation
• Emergency repairs: such as storm or water damage, or mechanical failures that weren’t budgeted for
• Seasonal spikes: like increased pool maintenance or landscaping during summer

Planned vs. Unplanned Expenses

Major projects like lift upgrades or roof replacements are essential to maintaining your building’s value and safety. These may be covered by existing capital works funds or may require a special levy to fund them properly.

Other factors that can impact levies include regulatory compliance, such as fire safety upgrades or cladding remediation or professional services, like legal advice or engineering reports for unexpected issues.

What happens if you miss a payment?

Levy payment dates are agreed by owners at your AGM and cannot be changed without a formal resolution. To help keep you on track, we send a friendly SMS reminder a few days after the due date if payment hasn’t been received.

If a levy remains unpaid:

• ​Interest of 10% per annum will apply if payment is not received within 30 days of the due date, as set out by the legislation
• Ongoing non-payment may lead to formal debt recovery, with additional costs added

Late payments can affect your building’s ability to cover essential services and repairs, so it’s important to stay up to date.

Payment Plans and Financial Assistance

If you’re experiencing financial difficulty, we encourage you to reach out early, before interest builds or debt recovery begins. We can help you apply for a payment plan, which must be approved by your owners corporation.

Jamesons can assist with administering payment plans, including:

• Monthly or fortnightly payment schedules
• Ongoing tracking and reporting to your strata committee

Only your owners corporation can approve payment plans and waive interest. We’ll help facilitate the process, but the decision lies with your committee.

The key is early communication. Reaching out as soon as you need help gives us the best chance to support you and your building’s financial stability.