How Much Is Too Much For Strata Levies?


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A simple fact of strata living is that each strata’s levies are not the same. These mandatory body corporate fees can vary enormously depending on the type of building you own in, the services it provides, and can also be influenced by your strata management and how efficiently they are delivering their services. Here are some of the more common things to keep in mind when considering whether your strata levies are providing good value.

The types of strata levies

There are three main types of strata levies – administrative fund levies, capital works fund levies, and special levies.

Administrative fund levies cover the day-to-day expenses incurred in a strata living arrangement. Depending on the facilities in your strata, these can include such costs as cleaning, gardening, electricity and electrical work, plumbing, and taking out insurance.

The capital works fund is designed for larger and longer-term repairs and maintenance or unplanned work, like repairing concrete spalling or balconies.

Special levies are designed to cover any emergency, unexpected or planned upgrade expenses. These can be required from time to time to cover major works, both planned and unplanned, if there is not enough money in the capital works fund.

The average strata fees in NSW

According to the Flat Chat strata online forum, annual strata levies should fall between 0.8% and 1.2% of a property’s value when the complex offers facilities, and between 0.3% and 0.7% when there are little to no facilities.

It is clear, then, that adding facilities to your strata will increase the property’s budget. Adding a swimming pool or even a building management team will all come at a cost to the administrative fund. If these services are added, a rise in strata levies should be expected.

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Reasons for strata levy increases

As mentioned, strata levy increases can be due to adding facilities or because of an insufficient amount of money in the capital works fund to cover repairs. If you live in an older building, for example, repairs may be needed more frequently than in a newer complex and, as such, you may face special levies from time to time in addition to the usual levies.

However, there is another important factor that strata levies can increase – inefficient strata management.

Strata management itself is a great thing to invest in. Without it, strata schemes can become messy and disorganised, putting undue stress on the shoulders of the owners. The best strata management companies can ultimately save you money by providing insightful and thoughtful financial advising and guiding you on how to run your strata effectively.

A mismanaged strata scheme, on the other hand, can often charge higher levies due to wastage, a need to pay for previous errors, and a lack of foresight, among other things. If your capital works funds are consistently low and frequently reliant on special levies, your strata management may be doing a poor job and the owners corporation might want to consider changing strata managers.

If you have any further questions on what your strata levies should look like, or are considering changing strata managers, contact the Jamesons team to discuss your options with experienced strata management professionals.

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