Short answer
Strata levies are worked out from the scheme’s budget. The owners corporation estimates what the administrative fund and capital works fund need for the coming year, and each owner’s share is generally set in proportion to their lot’s unit entitlement — so a lot with a larger entitlement pays a larger share. The owners set both the budget and the levies at the annual general meeting.
The two steps
- Estimate the year’s costs. The scheme prepares estimates for the administrative fund (day-to-day running) and the capital works fund (long-term major works). See Admin Fund vs Capital Works Fund.
- Divide it by unit entitlement. The totals are split among the lots according to unit entitlement — the figure recorded on the strata plan that sets each lot’s share of ownership, levies and voting. The result is set as each lot’s contribution, usually billed quarterly.
Who sets it
The owners corporation, at the annual general meeting — it approves the estimates and determines the contributions (who sets the budget). The committee or a strata manager usually prepares the figures, but the owners vote them through.
Getting it right without the headache
Levy calculation has to be exact — the split by entitlement, the two funds kept separate, the notices issued on time. That precision is exactly what a system handles well: a system such as Straita works the per-lot split from unit entitlement, issues the levy notices and tracks what’s owed, so the committee just approves the budget and the figures are right.
Primary sources
- Strata Schemes Management Act 2015 (NSW) — estimates, the two funds, and levying of contributions by unit entitlement.
- NSW Government — Strata schemes (Fair Trading) — levies and financial management.