The one-minute guide
What a levy notice is: A formal demand from the Owners Corporation for your share of the scheme's running costs and long-term maintenance fund.
The two main funds: The administrative fund covers day-to-day costs. The capital works fund covers major future repairs and replacements.
How your amount is calculated: Your lot's unit entitlement, expressed as a fraction of the total, determines your share of every levy.
When you must pay: The due date on the notice is a legal deadline. There is a one-month grace period before interest applies, but voting rights at meetings can be affected by any unpaid amount.
If you cannot pay: Contact your strata manager before the due date. A payment plan is a legal right you can request. Silence makes things worse.
Key tip: Keep every levy notice. They are financial records for your property and may be needed when you sell.
If you own a strata property in NSW, levy notices arrive in your letterbox or inbox regularly, and they can look deceptively simple. But behind that invoice is a set of legal obligations, financial calculations, and rights that every owner should understand. This guide explains every part of a levy notice, what the two main funds are, how your share is calculated, what happens if you pay late, and what to do if you are struggling.
What is a strata levy?
A strata levy (also called a strata contribution) is a mandatory payment made by each lot owner to the Owners Corporation (OC). Levies are the financial engine of your strata scheme. They fund everything from cleaning the common areas and insuring the building to replacing the roof or repainting the facade.
Levies are not optional. They are a legal obligation under the Strata Schemes Management Act 2015 (NSW). Every lot owner must pay their contributions on time, regardless of whether they live in the property, rent it out, or are unhappy with how the scheme is being managed.
| Audience |
Relevance |
Why it matters |
| Lot owners |
Essential |
You are legally required to pay levies on time. Interest applies after a one-month grace period, and any unpaid amount can affect your voting rights at meetings. |
| Investors and landlords |
Essential |
Levies are your obligation, not your tenant's. You cannot pass the levy notice to a tenant. |
| Committee members |
Critical |
You set the levy amounts at the AGM and must understand what each fund covers. |
| Prospective buyers |
Very useful |
Outstanding levies and the health of the capital works fund reveal a lot about a scheme's financial position. |
| Tenants |
For information |
You do not pay levies, but they indirectly affect your building's maintenance and condition. |
TL;DR: A strata levy is a compulsory contribution to your scheme's shared costs. Every owner must pay, on time, regardless of circumstance.
The two main funds: what your money pays for
In NSW, every strata scheme must maintain at least two separate funds. Your levy notice will show a contribution to each one.
The administrative fund
The administrative fund covers the scheme's routine, recurring operating costs. Think of it as the scheme's day-to-day current account. Common expenses paid from this fund include building insurance premiums, strata management fees, cleaning and gardening of common areas, electricity for common area lighting and lifts, minor repairs and maintenance, water and waste charges for common property, accounting and legal fees, and pest control.
The administrative fund levy is set each year at the Annual General Meeting (AGM) based on a budget prepared by the strata manager. The budget estimates the year's expected expenses, and the levy is set to cover them.
The capital works fund
The capital works fund (previously called the sinking fund) is for major, infrequent expenditure. It is the scheme's long-term savings account, building up reserves over time to pay for significant works when they are needed. Examples include roof replacement or major roof repairs, repainting the building exterior, replacing lifts, pool equipment, or air conditioning systems, resurfacing driveways or car parks, major waterproofing works, and replacing common area carpets, furniture, or fixtures.
The capital works fund must be supported by a capital works fund plan. From 1 April 2026, NSW requires all strata schemes to use the mandatory digital Capital Works Fund Planner via Strata Hub, which projects the fund's income and expenditure over a minimum of 10 years. This plan drives the capital works fund levy.
Why the capital works fund matters
An underfunded capital works fund is one of the biggest warning signs in strata. If the fund is too low when a major repair is needed, the OC must raise a special levy to cover the shortfall, which can mean a sudden, large unexpected bill for every owner. When buying into a strata scheme, always ask your solicitor to check the capital works fund balance and the capital works fund plan as part of your due diligence.
Other levies that may appear on your notice
In some circumstances, additional levies may appear. A special levy is a one-off levy raised to fund a specific expense that existing funds cannot cover — this might be an emergency repair, a legal dispute, or a major capital work not anticipated in the plan, and it requires a resolution at a general meeting. Some schemes also raise a sustainability infrastructure levy for upgrades such as solar panels or EV charging infrastructure, which since July 2025 requires only a simple majority vote.
TL;DR: Your levy is split between the administrative fund for day-to-day costs and the capital works fund for major future repairs. Both are essential to the scheme's financial health.
How your levy amount is calculated
The total levy for the scheme is set at the AGM. But how is your individual amount determined? The answer is unit entitlements.
Unit entitlements explained
Every lot in a strata scheme is assigned a unit entitlement: a number recorded in the strata plan that reflects the relative value of that lot compared to all others in the scheme. Unit entitlements are set when the strata plan is registered and are generally based on the market value of each lot at the time of registration.
The levy formula
Your levy = (Your lot's unit entitlement ÷ total unit entitlements for the scheme) × total levy for the fund.
Example: If your lot has a unit entitlement of 50 and the total for all lots in the scheme is 500, your share is 10%. If the total administrative fund levy for the year is $80,000, your annual contribution is $8,000, or $2,000 per quarter.
This means that larger or more valuable lots generally pay a higher levy than smaller lots. A penthouse with a high unit entitlement will pay more than a studio with a low one, even though both owners have equal voting rights at general meetings.
Where to find your unit entitlement
Your unit entitlement is shown on the strata plan for your scheme. It may also appear on your levy notice itself. If you cannot find it, your strata manager can tell you your unit entitlement and the scheme total.
Can unit entitlements be changed?
Unit entitlements can be changed, but it is a complex and relatively rare process. It requires an application to the NSW Land Registry Services or NCAT, and is typically only pursued if there is a genuine argument that the original entitlements were incorrectly set. It is not something that can be changed at an AGM.
TL;DR: Your levy is your lot's unit entitlement as a fraction of the scheme total, multiplied by the fund budget. Larger or more valuable lots pay a proportionally higher levy.
Reading your levy notice: a field-by-field guide
Levy notices vary slightly between strata managers, but they all contain the same core information. Here is what each field means.
| Term on your notice |
What it means |
| Lot number |
Your specific unit or lot as defined in the strata plan. This identifies the property the levy relates to. |
| Scheme name / SP number |
The name and strata plan number of your scheme, registered with NSW Land Registry Services. |
| Levy period |
The period this levy covers, such as 'Quarter ending 31 March 2026'. Most schemes levy quarterly, though some levy half-yearly or annually. |
| Administrative fund levy |
Your contribution to the scheme's day-to-day operating fund for this period. |
| Capital works fund levy |
Your contribution to the scheme's long-term repair and replacement savings for this period. |
| Special levy (if applicable) |
A one-off charge for a specific approved expenditure, such as an emergency repair or major project. |
| Opening balance |
Any amount already on your ledger before this notice, such as a credit from overpaying previously, or an outstanding amount from a prior period. |
| Total amount due |
The full amount you must pay, including all funds and any opening balance adjustments. |
| Due date |
The legal payment deadline. Interest accrues automatically from the day after this date if not paid within the one-month grace period. |
| Interest rate |
The rate of interest that applies to overdue amounts, as set in the scheme's by-laws or the default rate under the Act if no by-law applies. |
| Payment reference / lot reference |
A unique code to include when making payment, so it is allocated to your lot correctly. |
| Payment options |
Methods accepted, such as BPAY, direct debit, online portal, or EFT bank transfer. |
| Unit entitlement |
Your lot's unit entitlement and the scheme total may appear here, showing how your share was calculated. |
TL;DR: Every levy notice contains your lot number, the period covered, the amount for each fund, the due date, and payment instructions. Check all fields carefully before paying.
When and how to pay
Payment frequency
Most NSW strata schemes raise levies quarterly. This means you will receive approximately four levy notices per year, one for each quarter. Some smaller or simpler schemes levy half-yearly or annually. The frequency is set by the OC at the AGM.
The due date is a legal deadline
The due date printed on your levy notice is not a suggestion. Under Section 85 of the Strata Schemes Management Act 2015 (NSW), there is a one-month grace period: if you pay within one month of the due date, no interest is charged at all. Once that month has passed, simple interest at 10% per annum applies to the overdue amount, calculated from the original due date. Your scheme's by-laws may specify a different rate, but the default under the Act is 10% simple interest per annum.
Separately, your voting rights at general meetings are affected by any unpaid levy amount, not just debts older than one month. If a meeting notice is issued while your levy is unpaid and you do not clear the balance before the meeting, you lose the right to vote at that meeting (except on resolutions requiring unanimity). Paying the full outstanding amount before the meeting begins restores your voting rights for that meeting.
How to pay
Your levy notice will set out the accepted payment methods. Common options include BPAY (using the biller code and your lot reference number), the Netstrata Owners Portal or Netstrata Space app for Netstrata clients, direct debit arrangements where available, and EFT or bank transfer using the account details on your notice.
Always use your payment reference
When paying by BPAY or bank transfer, always include your payment reference number exactly as shown on the notice. Without it, the payment cannot be automatically allocated to your lot and may sit in a suspense account, leaving your levy technically unpaid and accruing interest. If you have paid and are still receiving overdue notices, contact your strata manager immediately with proof of payment.
TL;DR: Pay by the due date. There is a one-month grace period before interest applies, but any unpaid amount can cost you your vote at a general meeting. Always include your payment reference.
What happens if you pay late or cannot pay?
Consequences of late payment
If you miss the due date, the following sequence typically unfolds:
- Within one month: No interest yet. However, if a general meeting notice is issued while your levy is unpaid, you are an unfinancial owner and cannot vote at that meeting unless you pay in full before it begins.
- After one month: Simple interest at 10% per annum begins accruing on the overdue amount, calculated back to the original due date. Your strata manager will usually send a reminder notice showing the outstanding balance plus accrued interest.
- Formal demand: If the debt remains unpaid, a formal letter of demand may be issued.
- Debt recovery: The OC can pursue outstanding levies through debt recovery, which may include engaging a debt collection agency or making an application to NCAT or a court. Legal and recovery costs can be added to your debt.
- Loss of voting rights: Any unpaid levy amount makes you an unfinancial owner under the Act. If a meeting notice is issued while you are unfinancial and you do not pay in full before the meeting, your vote does not count (except on motions requiring a unanimous resolution).
If you are having difficulty paying
Financial hardship happens. The most important thing you can do is communicate early. Contact your strata manager before the due date if you know you will have difficulty paying. From 27 October 2025, owners have strengthened legal rights in this area:
- You can formally request a payment plan using a prescribed standard form. The strata committee must respond in writing within 28 days.
- The committee cannot apply a blanket refusal policy. Each request must be assessed individually.
- If the OC unreasonably refuses a payment plan, you can apply to NCAT for an order.
- The OC must also offer a payment plan before commencing any debt recovery action against you.
- Every levy notice must include a Financial Hardship Information Statement with contact details for the National Debt Helpline (1800 007 007).
The OC is under no obligation to be lenient, but many will do so for owners who communicate proactively and in good faith. Silence and avoidance make the situation significantly worse.
Selling your property with outstanding levies
Outstanding levies do not disappear when you sell. If you have unpaid levies at settlement, they will typically be deducted from your sale proceeds. The buyer's solicitor will request a Section 184 certificate from the strata manager confirming the levies outstanding as at the settlement date. Any outstanding amount must be cleared before the title transfers cleanly. If you are planning to sell, check your levy account and clear any arrears early to avoid complications.
TL;DR: There is a one-month grace period before interest applies. However, any unpaid levy can cost you your vote at a general meeting from the moment a meeting notice is issued. Contact your strata manager early if you are struggling to pay.
Can you challenge or query your levy?
Receiving a levy notice does not mean you have no recourse if something looks wrong. There are legitimate ways to query or challenge levies.
If you think there is a calculation error
Contact your strata manager and ask them to explain the calculation. Provide your notice and ask them to confirm your unit entitlement, the scheme total, and the fund budgets. Errors do occasionally occur, particularly if a lot has been subdivided or if an adjustment to unit entitlements has recently been made.
If you think the levy is too high
The levy amount is set by resolution of the OC at the AGM, based on the approved budget. If you believe the budget is excessive or that funds are being mismanaged, you have the right to attend the AGM and vote against the proposed budget, request a copy of the financial statements and budget from your strata manager, ask questions at the AGM about specific expenditure items, and stand for election to the strata committee to participate in financial decision-making. Disagreeing with the levy amount does not entitle you to withhold payment. You must pay first and challenge the process through proper channels.
If you believe a special levy was improperly raised
Special levies must be approved by resolution at a duly convened general meeting. If you believe a special levy was raised without proper process, you can raise the matter with the strata manager and, if necessary, apply to NSW Fair Trading for mediation or to NCAT for a determination.
Important: pay first, dispute second
Under NSW strata law, you cannot withhold levy payments while disputing them. Even if you genuinely believe an error has been made, you must pay the levy by the due date to avoid interest and recovery action. Pursue the dispute separately through your strata manager, the committee, NSW Fair Trading mediation, or NCAT. If you are found to be correct, an adjustment or refund can be made.
TL;DR: You can query a calculation error or challenge a levy through proper channels, but you must still pay by the due date while any dispute is being resolved.
Frequently asked questions
Why has my levy gone up this year?
Levies increase for several common reasons: the scheme's insurance premium has increased (a very common driver in recent years), the capital works fund plan requires higher contributions to maintain adequate reserves, the cost of contractors or utilities has risen, or the committee has approved new services or maintenance items. The best place to understand the increase is the budget approved at the most recent AGM. Your strata manager can provide a copy.
I rent my property out. Does my tenant pay the levy?
No. Levies are the legal obligation of the lot owner, not the tenant. Your lease agreement may include a provision for the tenant to contribute to certain costs, but this is a private arrangement between you and your tenant. The OC will pursue you, not your tenant, for any unpaid levies.
I have just purchased the property. Am I responsible for the previous owner's unpaid levies?
Generally, no. When a property changes hands, the Section 184 certificate issued at settlement confirms the levies outstanding as at the settlement date, and these are typically adjusted between the buyer and seller at settlement. Any levies that fall due after settlement are your responsibility. If you believe you have inherited unpaid levies, contact your solicitor and strata manager immediately.
Can I get a discount for paying the full year upfront?
Some schemes offer a small discount for paying the full year's levies in advance. This is not standard and must be approved by the OC. Ask your strata manager whether this option exists for your scheme.
What is the difference between a regular levy and a special levy?
Regular levies are set at the AGM as part of the annual budget and cover predictable, ongoing costs. A special levy is an additional, one-off charge raised when existing funds are insufficient to cover a specific expense. Special levies require a resolution at a general meeting and are typically associated with major unexpected repairs, legal costs, or capital works not covered by the capital works fund.
I paid but my notice says I still owe money. What do I do?
This is almost always a payment reference issue. If you paid without including your correct lot reference, the payment may be sitting in a suspense account. Contact your strata manager with your proof of payment (a bank statement or receipt) and they can locate and allocate the payment. Do this promptly, as interest continues to accrue on what appears on the system to be an unpaid balance.
TL;DR: The most common levy questions relate to increases, tenant obligations, responsibility at settlement, and payment allocation. Your strata manager can answer all of these for your specific scheme.
Important
This article provides a general overview based on NSW strata legislation as at the date of publication, including reforms introduced by the Strata Schemes Legislation Amendment Act 2025 (NSW) that took effect from 27 October 2025. Levy amounts, interest rates, and fund requirements may differ between schemes depending on their by-laws and the resolutions passed at general meetings. For advice specific to your scheme, always consult your strata manager. Relevant legislation: Strata Schemes Management Act 2015 (NSW), Section 73 (administrative fund), Section 74 (capital works fund), Section 85 (levy contributions and interest), Schedule 1 (voting rights of unfinancial owners).
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