Strata Fees: What’s Included & How They’re Calculated

Property managers are often asked to explain strata fees to landlord clients, making a clear understanding of how they work an important part of managing strata-titled investment properties. Strata fees are one of the most misunderstood costs in investment property ownership, and when your investors don’t understand what they’re paying for, your phone starts ringing. This guide lays out exactly what strata fees cover, how they’re calculated and what you need to know to manage the conversation confidently on behalf of your landlord clients.

What Are Strata Fees?

Strata fees, also called strata levies, body corporate fees or owners corporation fees, depending on which state you’re in, are the mandatory quarterly contributions that every lot owner in a strata-titled property must pay. When your investor client buys an apartment, townhouse or villa in a shared complex, they automatically join the owners corporation, or body corporate in Queensland.

This means they’re legally required to contribute to the shared upkeep of the building. According to the NSW Government’s strata levy guidance, all owners in a strata scheme are charged a yearly levy, normally paid quarterly, to fund the running and maintenance of the scheme. This applies even if an owner has not received a levy notice. The obligation exists by law, not by notification.

Strata Fees, Body Corporate Fees and Owners Corporation Fees

The terminology varies by state, and knowing the distinctions helps when advising clients. NSW, ACT and WA use “strata levies,” “admin fund,” “capital works fund” and “lot entitlement,” while Queensland uses “body corporate levies,” “administrative fund,” “sinking fund” and “lot entitlement,” as outlined in this strata fee calculation guide. Victoria uses “owners corporation fees.” The purpose is broadly similar across Australia, owners contribute to shared building costs, but the specific terminology and legal requirements differ by jurisdiction. I treat state language as a client-service detail worth getting right, not a throwaway distinction.

The Three Types of Strata Fees

Most strata schemes collect contributions across two regular categories, plus a third that’s raised separately when needed. Property managers who understand all three can help their clients plan cash flow far more effectively.

1. Administrative Fund Levies

The administrative fund covers the day-to-day costs of running the building. As the Law Society of NSW explains, these levies fund routine expenses including common property maintenance, insurance premiums, strata manager fees and other regular expenses. In practice, this means:

• Cleaning: Lobbies, lifts, stairwells, corridors and car parks
• Gardening and landscaping: Maintained to agreed standards across the grounds
• Building insurance: Often the single largest line item, and the cost most prone to upward movement, which I cover below
• Utilities for common areas: Electricity for hallways, lift motors, outdoor lighting and common-area systems
• Strata manager fees: The professional service charge for the company or individual appointed to administer the scheme
• Routine maintenance and minor repairs: Replacing common-area fittings, attending to small defects, safety checks

2. Capital Works Fund Levies

This regular contribution funds longer-term needs. In NSW, it’s called the capital works fund, previously known as the sinking fund. In Queensland, “sinking fund” remains the common term. Under NSW legislation, strata schemes must maintain a 10-year capital works plan, a mandatory forward projection of anticipated major expenditure. Common capital works items include roof replacement, external repainting, lift modernisation, waterproofing and driveway resurfacing.

This is the fund that creates the most planning complexity. An investor who buys into a building with a depleted capital works fund may face a sudden special levy for work the scheme cannot otherwise afford, and as the property manager, you’ll be the first person they call.

3. Special Levies

Special levies are separate, one-off charges raised when the regular administrative and capital works contributions cannot cover an unexpected or unbudgeted expense. Storm damage, building defects, cladding remediation or a lift failure can trigger a special levy with relatively short notice. The NSW Government’s strata guidelines require at least 30 days’ notice before payment is due. A proactive property manager flags these early, explains the cause and helps the investor plan their cash flow.

What I Check Before Explaining a Levy Increase to an Owner

Before I have a fee-increase conversation with a landlord, I look at three things in order:

1. First, whether the increase ties to an ordinary annual budget increase approved through the scheme’s budget process. This is usually the easiest to explain because it comes from the agreed operating costs for the building rather than a surprise charge.
2. Second, whether it ties to a specific capital works item the owner can be shown on the 10-year plan, because a named project lands very differently to an unexplained dollar increase.
3. Third, whether it’s a special levy, in which case the conversation needs to happen before the notice arrives, not after, so the owner isn’t blindsided by both the cost and the surprise at once.

The order matters because owners respond very differently to a predictable, explained increase than to one they hear about for the first time on the same day as the bill. Getting the explanation to the owner ahead of the levy notice, with the reason already attached, is the single biggest factor in whether that conversation goes smoothly or becomes a complaint call.

How Strata Fees Are Calculated

Understanding the calculation gives you the tools to explain movements in fees to your clients without getting caught off guard.

The Annual Budget Process

Each year, the owners corporation, often guided by a professional strata manager, prepares a budget for the coming financial year. The budget estimates every recurring administrative cost and determines the required capital works contribution for the 10-year plan. The full budget is presented to all lot owners at the Annual General Meeting and approved by majority vote.

Once the total annual levy is approved, it’s divided among lot owners in proportion to their lot entitlement, the number assigned to each lot when the strata plan was first registered. The NSW Government’s strata guidance illustrates this clearly: in a three-lot scheme with total entitlements of 100, a more valuable lot might hold 40 while the others hold 30 each. Each owner’s levy is: lot entitlement divided by total scheme entitlements, multiplied by the total annual budget.

The Factors That Drive Variation

Strata fees vary enormously, and two physically similar buildings can carry very different levies depending on how the scheme is managed and what’s on the 10-year plan. The main drivers are:

• Amenities: A building with a pool, gym, concierge and rooftop terrace will carry a significantly higher administrative fund than a comparable building with no shared facilities. Every amenity has ongoing cleaning, maintenance, compliance and insurance costs
• Building age and condition: Older buildings often face higher maintenance costs and larger capital works contributions because more major works are approaching on the 10-year plan
• Insurance premiums: This has been one of the more consistent upward drivers in recent years. The Insurance Council of Australia’s 2024 strata policy paper reports that strata insurance premium rates have been steadily trending upwards in recent years, attributed primarily to extreme weather events and the hardening of the global reinsurance market
• Location: Beachfront and coastal properties carry higher insurance costs. High-rise CBD buildings carry higher compliance and maintenance costs than low-rise suburban complexes
• Number of lots: Smaller complexes spread costs across fewer owners, meaning higher per-lot levies on average

Average Strata Fees by State

The figures below are indicative private-market estimates rather than a fixed benchmark, drawn from current 2025 and 2026 market reporting. Average quarterly fees for a standard two-bedroom apartment fall approximately within these ranges:

• Sydney: $1,500 to $3,000 per quarter
• Melbourne: $1,200 to $2,500 per quarter
• Brisbane: $1,000 to $2,000 per quarter
• Perth: $800 to $1,800 per quarter
• Adelaide: $700 to $1,500 per quarter

Actual levies depend on the specific building, its amenity profile, maintenance history and the state of its capital works fund. High-amenity or luxury buildings can sit well above these ranges, especially where pools, gyms, lifts, concierge services, beachfront exposure or major capital works are involved.

For investors, a $2,000 quarterly levy adds $8,000 per year to holding costs, before council rates, water, mortgage repayments or your management fee.

What Strata Fees Do Not Cover

Strata fees cover the building and common property. They do not cover anything within the individual lot, unless the strata plan or by-laws determine otherwise. The standard exclusions are:

• Contents insurance: The owner is responsible for insuring their own belongings and fit-out within the lot
• Council rates: Billed directly to the individual owner, separate from scheme levies
• Maintenance and repairs inside the lot: A blocked drain, broken oven or leaking tap is generally the owner’s responsibility unless the issue arises from or affects common property
• Individual utilities: If the property is separately metered, the owner or tenant pays their own electricity, gas and water

The boundary between lot and common property is one of the most frequent sources of confusion and dispute. As a property manager, building a clear referral path to the strata manager and keeping your clients’ expectations accurate, saves considerable time. According to NSW Government’s strata roles guidance, the property manager manages the rental lease. If a tenant raises a strata-related issue, the property manager takes it up with the strata manager or the owner. Understanding where your responsibilities end and the strata manager’s begin makes your operation run far more smoothly.

Strata Fees and Tax: What Your Landlord Clients Need to Know

Strata levies have specific tax treatment that your investors often get wrong, and a simple explanation from you can prevent costly surprises at tax time. The Australian Taxation Office’s guidance on common property expenses sets this out clearly, and a registered tax adviser can confirm the position for each client’s circumstances.

Ordinary Levies vs Special Levies

Regular payments to the body corporate administrative fund, and to a general-purpose sinking fund for ongoing administration and general maintenance, are treated by the ATO as payments for services and can be claimed as an immediate deduction in the year they’re incurred. 

A special levy raised for a specific capital improvement is treated differently. The ATO is explicit that you cannot claim an immediate deduction for that kind of levy. Instead, it may qualify for a capital works deduction once the relevant work is completed, claimed over a longer period rather than all at once.

This is the distinction I flag to investor clients early, ideally before a special levy notice arrives. Knowing in advance that a special levy won’t behave like a normal quarterly contribution at tax time avoids a frustrating conversation with their accountant months later.

In practice, when I code a levy notice on behalf of an owner, I tag it by exactly that distinction: administrative fund, general-purpose capital works fund or special-purpose levy. That one piece of coding at intake is what lets the owner’s accountant treat the year-end figures correctly without having to reconstruct the history from twelve separate notices later.

The Administrative Load Behind Strata-Titled Portfolios

Managing investment properties within strata schemes adds a layer of administrative work that goes beyond standard residential management. Each property generates quarterly levy notices, possible special levy notices at irregular intervals, AGM communications, by-law documentation, strata inspection reports and ongoing liaison with the strata manager when issues cross the common-property boundary.

As the number of strata-managed properties grows, administrative tasks such as levy tracking, payment processing and owner communication can increase substantially. The work is necessary, but it doesn’t need to sit on your senior property managers’ plates.

I worked with Kellie, Operations Manager for a large New Zealand agency, who found her admin team overwhelmed by exactly this kind of financial processing. As she described it: “Having Virtual Assistants manage our invoice processing has significantly improved our efficiency. With one person focusing on the same task daily, invoices are processed much quicker.” With three dedicated VAs handling the financial processes, she found that “Managing this workload in-house would be overwhelming for one person, but with three VAs, it’s a huge advantage.”

The Strata Levy Admin System I’d Put in Place

The principle from Kellie’s experience applies directly to strata-adjacent administration. Here is the four-step system I use with agencies that want to bring order to it:

1. Capture every levy notice in one inbox or task queue: No exceptions, regardless of which property or which owner it relates to. If a notice can land anywhere other than the single queue, it eventually will.
2. Code each notice by owner, property, fund type and due date: This is the step most agencies skip, and it’s the one that pays off most at tax time and at owner-query time. Fund type, specifically administrative, capital works or special levy, determines how the figure gets treated come tax season.
3. Reconcile the payment against the owner statement: A levy that’s been paid but not reconciled against the owner’s records looks, from the owner’s side, exactly like a levy that hasn’t been paid. That confusion is avoidable.
4. Flag special levies, fee increases and AGM decisions before the owner asks: This is the step that changes the relationship from reactive to proactive. An owner who hears about a fee increase from you, with the reason attached, before they see it on a bank statement, has a completely different experience to one who has to call and ask what happened.

When one person owns this process daily, rather than it being scattered across whoever has a spare ten minutes, the work gets done faster, with fewer errors and without pulling your senior property managers away from client relationships. My real estate accounting services team handles financial administration at scale, including bill processing, invoicing, reconciliation and end-of-month reporting, so your property managers can focus on the work that protects and grows your rent roll.

FAQs: Strata Fees

Making Strata Work for Your Portfolio

Strata fees are more than a landlord education issue because they create admin pressure when levy notices, special levies, owner questions and statement reconciliation are not handled through a clear system. When you understand the fees, timing and responsibilities properly, you can answer owners with confidence and reduce avoidable complaint calls. If your team is losing hours to strata levy admin, my team can help build a cleaner process through PMVA’s real estate accounting support so your property managers can stay focused on owners, tenants and rent roll growth.