Short answer
Yes. Under the Strata Schemes Management Act 2015 (NSW), an overdue contribution carries simple interest at the rate of 10% per year, running from the date the levy became due until it’s paid. The owners corporation can resolve to charge no interest — either generally or in a particular case — but if it does nothing, interest applies automatically.
The rate and when it starts
Interest on an unpaid levy is set by the Act, not chosen by the committee. It is 10% per annum, simple interest (section 85). It accrues once the contribution is more than one month overdue, calculated on the amount that remains unpaid.
Because the rate is fixed in legislation, a scheme can’t set its own higher rate. What it can do is decide, by resolution, not to charge interest at all — see below.
Waiving interest
The owners corporation may, by resolution, decide that a particular overdue contribution (or overdue contributions generally) will carry no interest. This is useful where an owner has fallen behind for a genuine reason and the committee would rather keep the relationship than penalise them. Without such a resolution, the default is that interest is charged.
How a payment is applied
Where an owner in arrears makes a payment, the money is applied in a set order under the current rules: first to the outstanding levies, then to interest, then to any recovery costs. So a part-payment reduces the underlying debt before it touches the interest — an owner can’t be kept in arrears indefinitely by interest soaking up every payment.
Charging interest correctly, without the friction
Interest is meant to be fair to the owners who pay on time — but it only works if it’s applied consistently, from the right date, at the right rate, and reversed cleanly when the committee waives it. Straita tracks each levy from its due date, applies the legislated interest automatically, and records any waiver as a decision — so a self-managed committee charges interest by the book without doing the arithmetic or the awkward chasing by hand.
Primary sources
- Strata Schemes Management Act 2015 (NSW) — interest on overdue contributions and waiver by resolution (s 85).
- NSW Government — Strata schemes (Fair Trading) — levies, arrears and interest.