Apartments & townhouses · Every state

Strata and body corporate fees

Turn your levy notice into a yearly cost, split by fund, and see the rental yield left after levies.

Your tally

Levies a year

$4,800

0.7% of the property’s value, and $92.31 a week.

Admin $3,200Capital works $1,600

What it does to the yield

Rent a year$31,200

Gross yield (rent against price)4.5%

Rent eaten by levies15.4%

Yield after levies3.8%

The capital works fund is 33.3% of your ordinary levies — the share that is saving for work still to come.

Levy amounts come from your own notice — they are set by each scheme and no calculator can know them. Yield after levies is before land tax, insurance, management, repairs and vacancy. General information only — not financial or legal advice.

Next: every other cost of the rental → Rental yield calculator

Buying? Check the levies before you sign.

The agent’s quarterly figure is not the only place to look, and what you can see before signing differs by state:

Victoria — the Section 32 statement must include an owners corporation certificate, showing the current fees, any special levies approved and the funds held. A Section 32 is sometimes prepared up to 12 months before the sale, so Consumer Affairs Victoria suggests asking for a new certificate before settlement or inspecting the owners corporation’s register.
Queensland — the seller must give you the body corporate certificate before you sign.
New South Wales — the government advises a strata search report before you buy, which a conveyancer can examine for you, and a section 184 certificate from the owners corporation shows the levies, any arrears and how the 10-year capital works plan will be funded.
Western Australia — the seller must give a precontractual disclosure statement before the buyer signs.
ACT — a unit’s required documents include the unit title sale certificate.

What a conveyancer does lists each state’s disclosure documents.

The number on the notice, annualised

A levy notice usually arrives quarterly and gets paid without much thought. Annualised, split by fund and set against the rent, it looks like a very different number — and for an investor it is the difference between a gross yield and the yield you actually get.

Strata, body corporate, owners corporation: the same thing

The name changes at the border, and so do the rules about where the money goes. The body that runs the scheme is an owners corporation in New South Wales, Victoria and the ACT, a body corporate in Queensland, Tasmania and the Northern Territory, a strata company in Western Australia, and a strata corporation in South Australia. Only some of them must keep the two funds NSW requires:

What each state and territory calls the body that runs a strata scheme, what its law says about funds, and the Act.
State	The body, what its law says about funds, and the Act
New South Wales	Owners corporation An administrative fund and a capital works fund. A two-lot scheme of detached buildings can resolve unanimously to do without the second. Strata Schemes Management Act 2015, ss 73–74
Victoria	Owners corporation Annual fees, and special fees when needed. A maintenance fund is compulsory only with a maintenance plan, which tier 1 and 2 owners corporations (more than 50 occupiable lots) must have. Owners Corporations Act 2006
Queensland	Body corporate An administrative fund and a sinking fund, budgeted at each AGM. The sinking fund budget must reserve for at least 9 years beyond the current one. Body Corporate and Community Management Act 1997 (most schemes)
Western Australia	Strata company Contributions go into funds that include an administrative fund and a reserve fund. Strata Titles Act 1985
South Australia	Strata corporation, or community corporation in a community scheme A community corporation must keep an administrative fund and a sinking fund. A strata corporation is not required to have a sinking fund. Strata Titles Act 1988; Community Titles Act 1996
Tasmania	Body corporate One fund for all income and spending, which the body corporate may split into recurrent and capital parts. Strata Titles Act 1998, s 82
ACT	Owners corporation An administrative fund, plus a sinking fund with a 10-year plan once there are 4 or more units. Unit Titles (Management) Act 2011, ss 73, 81–82
Northern Territory	Body corporate Annual contributions, and a levy for a single item of expenditure if owners agree by special resolution. The management modules prescribe no separate funds. Unit Title Schemes Act 2009 and its management modules

None of that changes the job. Whatever it is called, the body levies the owners — normally in proportion to each lot’s entitlement — maintains and insures what they share, and runs the scheme from what it collects.

The two funds in a NSW scheme, and why the second one matters

The NSW Act requires two funds and says what each one is for, which makes it a useful model even if your scheme is elsewhere. The administrative fund pays for running the place this year: the Act’s own examples are insurance, water, electricity, carpet cleaning, lawn mowing and minor maintenance of the common property, and the NSW Government adds strata management fees. It is budgeted to be spent.

The capital works fund, previously called a sinking fund, is saving for work that has not happened yet — repainting, or replacing the roofing, guttering, fences or lifts. A NSW scheme must plan it ten years ahead and review that plan at least every five years. It is budgeted to accumulate.

This is where two apartments that look identically priced diverge. A scheme with a thin capital works fund has lower quarterly levies and an unfunded liability; the work still has to happen, and when it does the money is raised as a special levy instead. The NSW Government’s own buying guide warns that low levies could mean a steep rise in future fees. So the cheap-looking building can turn out to be the expensive one, just later and in a lump. When you are comparing, ask for the capital works fund balance and the 10-year plan, not only the levy figure.

What a gross yield leaves out

A gross yield is rent against price, and nothing else. On the default numbers above that is 4.5% — a respectable figure. Levies of $4,800 take it to 3.8%, and they do it before land tax, insurance, management fees, repairs or a single week of vacancy. A unit in a strata scheme carries levies that a house on its own title does not, so comparing the two on gross yield alone leaves out a cost only one of them pays.

If you are weighing the whole investment case rather than just the levies, the negative gearing calculator takes the full set of outgoings and shows the after-tax position.

Frequently asked questions

What are strata fees?

Levies every lot owner pays to the scheme’s owners corporation, body corporate or strata company, which spends them maintaining and insuring what the owners share — the roof, lifts, common walls and gardens — and running the scheme. How the money is divided depends on the state. NSW requires an administrative fund and a capital works fund, Tasmania requires a single fund, and Victoria makes a maintenance fund compulsory only for its larger schemes, so check the funds named on your own levy notice.

What is the difference between strata fees and body corporate fees?

Nothing, functionally — the two phrases describe the same levy, and which one you hear mostly depends on where you live. Queensland’s government calls them body corporate fees; in NSW the bill comes from an owners corporation but is still called strata levies; Victoria’s owners corporations charge annual fees, and the body there was itself called a body corporate until the end of 2007. The levies do the same work whichever word appears on your notice.

What is the capital works fund, and why does it matter?

It is the scheme’s savings account for work that is coming but has not arrived, such as repainting or a new roof. NSW renamed its sinking fund the capital works fund; Queensland, the ACT and SA community schemes still call it a sinking fund, Western Australia a reserve fund, and Victoria’s larger schemes keep a maintenance fund. A scheme that keeps this fund thin looks cheap on the levy notice and is not — the money is still needed, and it arrives later as a special levy instead. When comparing two apartments, compare the fund’s balance, not just the quarterly figure.

What is a special levy?

A one-off charge for a cost the budget did not cover. Consumer Affairs Victoria’s examples are an urgent repair to the building or defending legal action; Queensland’s is a paint job that costs more than the sinking fund budget allowed for it. The name varies — a special contribution in Queensland, special fees in Victoria — and your share normally follows your lot’s entitlement, which is why the strata records matter as much as the levy notice. Add any special levy you know about to the calculator above: on the example figures, a $20,000 special levy takes the yield after levies from 3.8% to 0.9%.

Do strata fees affect rental yield?

Yes, and a gross yield leaves them out by definition — it is rent against price, nothing else. On a $700,000 apartment renting at $600 a week, the gross yield is 4.5% — but $4,800 of levies takes it to 3.8% before a single other cost. That is 15.4% of the rent gone to levies alone, and land tax, insurance, management and repairs still come out of what is left.

Are strata fees tax deductible?

On a rental property, the ATO draws the line between regular levies and special ones. Regular payments into the administration fund or a general-purpose sinking fund, for ongoing administration and general maintenance, are deductible when you incur them. A special levy to fund a particular capital improvement is not deductible — whether it goes into a special purpose fund or is a special contribution to the general-purpose sinking fund — though one raised for certain construction costs may earn a capital works deduction once the work is finished. Two traps: garden maintenance, repairs or building insurance already paid through the levy cannot be claimed a second time, and the fees must be apportioned if the property is partly private. Keep the levy notices, which show what each payment was for.