Understanding Capital Works Fund Adequacy
How it works
Enter your building details — type, height, age, and number of lots — and the calculator pre-fills typical replacement costs and lifespans for major building components. Adjust any values you know from your building's 10-year capital works plan or strata report.
Add your current fund balance and annual contribution amount. The calculator projects your fund balance year-by-year over 10 years, factoring in contribution growth and scheduled replacement costs.
The results show your funding ratio, a status assessment, and — if the fund is short — how much additional funding is needed per quarter per lot to close the gap.
When to use this calculator
- You're buying a property and want to assess whether the capital works fund is adequate before making an offer
- You're on the strata committee and need to review funding adequacy before the AGM
- Your building has received a new 10-year capital works plan and you want to model different contribution scenarios
- You want to understand how upcoming major works will impact the fund balance and whether a special levy might be needed
- You're considering whether a contribution increase is needed to avoid a future special levy
Key concepts
- Capital Works Fund (Sinking Fund)
- A reserve of money maintained by the owners corporation for planned major maintenance, repairs, and replacements of common property. Funded by quarterly levies from all lot owners.
- Funding Ratio
- The ratio of total available funds (current balance plus projected future contributions) to total projected replacement costs over 10 years. A ratio of 100% or above means the fund can cover all upcoming costs without a special levy.
- 10-Year Capital Works Plan
- A professionally prepared document that identifies all major maintenance and replacement items, estimates their costs, and schedules when they will be needed. Required by law in most Australian states.
- Special Levy
- A one-off payment raised when the capital works fund cannot cover a major expense. Adequate fund contributions reduce the likelihood of special levies.
Example: 30-Lot Mid-Rise Apartment, 15 Years Old
A 30-lot mid-rise apartment building (established, ~15 years old) has a current capital works fund balance of $150,000 and contributes $50,000 per year (growing at 3% p.a.).
Over the next 10 years, the building needs: external painting ($150,000 in Year 3), waterproofing ($200,000 in Year 5), and a fire safety upgrade ($120,000 in Year 8). Total projected costs: $470,000.
Total available: $150,000 (balance) + $573,193 (contributions over 10 years) = $723,193. Funding ratio: 154% — Well Funded. No additional contributions needed, though the fund balance dips after Year 5 when waterproofing is paid.
Sinking Fund FAQ
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