Strata levies and special levies explained — buying a NSW apartment

The short version

In a NSW strata scheme, the owners corporation — every lot owner together — looks after the common property: the roof, the walls between units, the lifts, the lobby, the gardens, the building insurance. To pay for all that, it charges levies, usually every quarter. When you buy a lot, those levies become your recurring cost, on top of your mortgage and council rates. A special levy is a one-off charge on top, raised when the regular funds don't stretch to cover something big. It's the part buyers are most often blindsided by.

The two funds every strata scheme runs

Under the Strata Schemes Management Act 2015 (NSW), an owners corporation keeps two separate pots of money, and your levies feed both.

• The administrative fund (section 73) is the everyday fund — cleaning, gardening, building insurance, electricity for common areas, the strata manager's fees, minor repairs. It covers the recurring running costs.
• The capital works fund (section 74) — you may still hear it called the "sinking fund" — is the fund set aside for the big, occasional jobs: repainting, replacing guttering or a lift, waterproofing, façade repairs. The scheme is meant to build this up over time so those costs don't all land at once.

The Act requires the owners corporation to prepare a 10-year capital works fund plan (section 80) estimating the major expenses ahead and how they'll be funded. A healthy plan with money actually behind it is one of the clearest signs of a well-run building.

Where a special levy comes from

When a cost arrives that the two funds can't cover — a large repair, a defect rectification, an insurance shortfall, a legal dispute — the owners corporation can vote at a general meeting to raise a special levy (a special contribution) from all owners, split by unit entitlement. It isn't optional: once it's passed, every owner has to pay their share by the due date, including the person who only just bought in.

This is the trap. If a special levy is already being discussed — or has been struck but not yet collected — the bill can fall to you shortly after settlement, even though it relates to work decided before you owned the lot. A thinly funded capital works fund in an ageing or defect-prone building is a warning that a special levy may be coming.

What the contract should tell you

A NSW contract for the sale of a strata lot includes strata information, and you (or your conveyancer) can obtain a section 184 certificate — the strata information certificate — from the owners corporation. Between the contract documents and that certificate, you should be able to see:

• the current levy amount and how often it's charged;
• whether the seller is in arrears on their levies;
• any special levy already struck, and how much is outstanding;
• the balances of the administrative and capital works funds;
• the by-laws, and any notable spending or major works on the horizon.

A fuller strata records inspection — going through the minutes, the financial statements and the capital works fund plan — is where the real picture lives, and it's worth arranging before you commit rather than after.

What to check before you sign

1. The current levies. What's the quarterly figure, and what does it cover? Budget it in as a permanent cost, not a footnote.
2. Any special levy — struck or looming. Ask directly whether one has been raised or is under discussion, and who's liable for an unpaid amount at settlement.
3. The capital works fund balance. A near-empty fund in an older building often means a special levy is a question of when, not if.
4. Seller arrears. Confirm the seller's levies are paid up to settlement so you don't inherit a debt on the lot.
5. The 10-year plan and recent minutes. Major works flagged there tell you what's coming and roughly what it may cost.

Common questions

How often do I pay strata levies?

Most schemes levy quarterly, though the interval is set by the owners corporation. Your contract and the section 184 certificate show the current amount and frequency for the lot you're buying.

Can I be made to pay a special levy raised before I bought?

In practice, yes — liability for an unpaid levy generally runs with the lot, so if a special levy is struck and unpaid at settlement it can become your problem. Who bears it is something to settle in the contract and adjust at completion, so raise it early. Our deposit and settlement guide explains how adjustments work at completion.

Are levies higher in a new building?

Not necessarily lower. New buildings can look cheap early because the capital works fund is starting from zero and few major repairs are due yet — but defects in newer strata are a known risk, and rectifying them can drive special levies. If you're buying into a new scheme, our off-the-plan NSW guide covers the extra checks that apply.

Is this the same as an owners corporation in Victoria?

The idea is the same, but the law and the terms differ. Victoria calls the body an owners corporation and discloses its fees through the Section 32 vendor statement — see our Victorian owners corporation guide. For a broader pre-signing run-through, the NSW contract review checklist pulls the strata checks together with everything else.