How Much Should Our Strata Levies Be?

First published: 28 September 2026 · Last updated: 28 September 2026

The short answer

Take your building's sum insured — the replacement value on your certificate of currency — and compare 0.5–1% of it with what's going into your capital works fund each year (low end for a simple walk-up, high end for lifts and plant). That's the sense-check quantity surveyors and plan writers use, and your owners corporation already has the number on file. If your contribution is well under it, a conversation about levies is probably overdue.

There's no official figure — NSW Fair Trading's position is that the right amount "will be different for every scheme" — and the percentage-of-property-value rule you'll find elsewhere measures the wrong thing, because your unit's price is mostly land and postcode. This guide walks through the two-minute test, what it can't tell you, and the half of the levy most guides skip: the administrative fund. It's a sense-check, not a budget, and it isn't financial advice.

Two funds, two different questions

Every NSW strata levy is really two levies, and they answer different questions.

The administrative fund asks: what does the building need now, and every year? It pays for day-to-day running: insurance, electricity and water for common areas, cleaning, gardening, pest control, and the routine maintenance and small repairs that keep common property in order.

The capital works fund asks: what will the building need over the next decade? It pays for the big, less frequent items: repainting, replacing fixtures and fittings, roofs, waterproofing, and new infrastructure like solar. Your 10-year capital works plan is meant to set this one, and our capital works fund guide explains how.

Both are approved as a budget by majority vote at the AGM and shared between owners by unit entitlement. Most arguments about "our levies" are really about one fund or the other, so it helps to check them separately.

The rule of thumb you'll find

Ask the internet how much strata levies should be and you'll get a percentage of what your unit is worth. That's usually about 0.3–0.7% a year for a building with no facilities, and 0.8–1.2% with a lift, pool or gym, covering both funds together.

It's a market convention, repeated on forums and agents' and conveyancers' sites. It has no official standing. But it's what comes up first, so it's what ends up in the room at the AGM.

Why it measures the wrong thing

The percentage is fine. What it's a percentage of is the problem.

Your unit's price is mostly land and postcode. The roof over a two-bedroom unit in Penrith costs about the same to replace as the roof in Chatswood, but the Chatswood unit is worth far more. A formula based on unit value ties your savings to the property market, and the property market doesn't build anything.

Run it on a typical North Shore walk-up:

• A two-bedroom unit worth around $1,000,000
• Half a per cent is $5,000 a year in total levies
• Roughly a third of that usually goes to the capital works fund: about $1,650 a lot
• Across 12 lots, that's roughly $20,000 a year set aside for the building's entire future

Then price a roof, or the balconies. Each can be a six-figure job, and in older buildings they tend to come due around the same time.

A better test: use the number you already insure

There's a second rule of thumb that committees rarely hear about, because it's used by quantity surveyors and plan writers: put 0.5–1% of the building's replacement value into the capital works fund each year. Use the low end for a simple walk-up and the high end for a building with lifts and plant.

You already have that number. NSW owners corporations must insure the building for its full replacement value, and that figure (the sum insured) is on your certificate of currency. It's also part of the information every scheme reports to the NSW Government each year, alongside the capital works fund balance.

The two-minute test:

1. Find the certificate of currency and note the sum insured.
2. Take half a per cent of it.
3. Compare that with what your building is actually putting into the capital works fund this year.

For the 12-lot example above, insured at $6–7 million, half a per cent is $30,000–$35,000 a year, compared with the $20,000 the market-value rule produced. And that's the version with no lift.

We ran it on our own building

Our founder, James, has served on the committee of an 18-lot, early-1970s walk-up on Sydney's North Shore for more than a decade. The building was revalued for insurance this year at $9 million, so half a per cent comes to $45,000 a year into the capital works fund.

At this year's AGM the owners voted, unanimously, for a two-year pathway:

So this year's capital works contribution sits about $7,000 under the test, and next year's clears it. That's what the test is for. It doesn't say the building is in trouble. It says the first year is catching up and the second year gets there.

Even that took a 20% increase, and the owners passed it unanimously.

What the test can't tell you

Be honest about its limits:

• The sum insured isn't pure construction cost. It includes demolition, debris removal and professional fees, so it runs higher than a builder's price. That's why this is a smell test, not a target.
• A stale valuation gives a stale answer. Fair Trading suggests a new valuation every two to five years. If yours is older, the test is only as good as that figure.
• It can't see the building. A scheme that has just re-roofed and repainted should be contributing less for a while, and its plan should say why. A building that hasn't touched either in 20 years may need more than the test suggests.

The test flags a gap. It doesn't diagnose one. Diagnosing it takes a current, condition-based 10-year plan, prepared by someone who has actually walked the building.

The admin fund: build it from the ground up

There's no respectable percentage for the administrative fund either, and it's usually the fund that gets the least thought. The better approach is to build it up line by line.

Start with the fixed costs: insurance premium, common-area electricity and water, any strata management or accounting fees, and statutory items such as the annual fire safety statement if your building has a fire safety schedule.

Then add the routine care. This is the part small buildings most often under-budget, because nobody has written it down. A typical list for an older walk-up:

Then add a realistic allowance for small repairs: the dripping tap, the loose paver, the door frame that's pulled off the wall. None of these belong in a 10-year plan, and none should have to wait for one.

If a service on that list isn't happening at your building, it's worth asking whether that's a decision or an omission. Omissions tend to show up later in the capital works fund, as bigger bills.

When the numbers come up short

If the test says your capital works fund is well behind, or your admin budget has no line for routine care, a committee has three ways to close the gap:

1. Set the regular levy at a realistic number. It's the least dramatic option and usually the cheapest, because the cost is spread over years rather than landing all at once.
2. Raise a special levy for a specific project. It follows the same approval process as ordinary levies and is shared by unit entitlement, but it lands as one lump sum on every owner.
3. Borrow, through a strata loan. It's useful for large, urgent work, but it comes with interest and needs the owners' approval. Get specialist advice first.

Delay isn't a fourth option. Deferred work usually costs more when it's finally done, and since 2025 there are real consequences for owners corporations that don't maintain common property (what happens if an owners corporation doesn't maintain common property).

Three things worth doing this month

1. Find your certificate of currency. Note the sum insured and the date of the last valuation. If it's more than five years old, put a revaluation on the next agenda.
2. Run the test. Half a per cent of the sum insured against this year's capital works contribution. Write both numbers down.
3. Check the admin budget against the routine-care list above. For each item, is it in the budget, and is it actually happening?

If both numbers look healthy, you've spent ten minutes confirming it. If they don't, you now have a number to argue from, and after more than a decade on his own building's committee, James would say that's the hard part. Finding the money is rarely what stalls a committee. Making the case for it is.

How we can help

For the capital works side, our 10-Year Capital Works Fund Plan is built from an on-site inspection rather than a desk estimate. For the admin-fund side, our On-site Maintenance Report walks the common property and gives the committee a photographed, prioritised list of what needs doing now, plus the routine services worth budgeting for. Not sure where to start? The free Building Health Check takes about five minutes.

Disclaimer: This guide provides general information about NSW strata levies and budgeting. It is not financial or legal advice. For advice about your scheme's specific circumstances, consult an appropriately qualified professional.