How Are Strata Fees Calculated?
Strata fees don't appear out of thin air — they follow a structured three-step process that all Australian strata schemes use to determine how much each lot owner pays.
The calculation combines the building's annual operating budget, a long-term capital works plan, and each lot's lot entitlement — a number that determines your proportional share of the total costs.
Understanding this process helps you assess whether your levies are reasonable, anticipate future increases, and make better-informed decisions when buying into a strata scheme.
Use our Strata Fee Calculator to estimate what levies might look like for your property type and building.
Updated: 2026
How strata fees are calculated — at a glance
Three key components determine your strata levy:
- Annual operating budget: the total cost of running the building for the year (insurance, cleaning, repairs, management fees)
- Capital works contribution: your building's annual contribution to the long-term savings pool for major future repairs
- Lot entitlement: your lot's proportional share of the scheme — determines what percentage of the total budget you pay
The two funds are combined into your total levy, then split into quarterly payments. The admin fund covers day-to-day costs; the capital works fund accumulates reserves for major works.
Estimate my strata fees →Step 1: The strata scheme prepares an annual budget
Each year, the owners corporation — led by the strata manager — prepares a budget for the coming financial year. This budget covers all the recurring costs of running and maintaining the building's common property. It forms the admin fund component of your levy.
The budget is presented to all lot owners at the Annual General Meeting (AGM), where owners vote to approve it. Once approved, the total budget is divided among all lot owners according to their lot entitlements.
Typical annual budget costs
| Expense | Typical Annual Cost |
|---|---|
| Building insurance | $10,000 – $100,000+ |
| Cleaning & maintenance | $5,000 – $30,000 |
| Electricity (common areas) | $5,000 – $15,000 |
| Gardening & landscaping | $2,000 – $10,000 |
| Strata management fees | $3,000 – $8,000 |
| Minor repairs & maintenance | $5,000 – $20,000 |
Costs shown are indicative annual totals for a medium-sized building. Actual amounts vary by building size, location, and condition.
Step 2: Capital works planning
Alongside the annual budget, the owners corporation must maintain a 10-year capital works plan (required by law in most Australian states). This plan forecasts major building works that will be needed over the coming decade — things like roof replacement, lift modernisation, or exterior repainting.
Each year, a contribution is made to the capital works fund (also called the sinking fund) to accumulate enough reserves by the time each major work is expected to occur. This annual contribution is added to the admin fund total to arrive at the overall levy that owners pay.
Common capital works expenses
| Major Repair | Typical Cost |
|---|---|
| Roof replacement | $50,000 – $300,000 |
| Lift modernisation | $100,000 – $400,000 per lift |
| Exterior repainting | $50,000 – $250,000 |
| Waterproofing repairs | $20,000 – $200,000 |
| Structural repairs | $50,000 – $500,000+ |
Costs are indicative totals for a medium-sized residential building. Actual costs vary significantly by building size, materials, and location.
Step 3: Costs are divided using lot entitlements
Once the total annual levy (admin fund + capital works fund contribution) is set, it is divided among all lot owners in proportion to their lot entitlement. Every lot in a strata scheme is assigned a lot entitlement number when the strata plan is registered. This number reflects the relative size and value of each lot compared to others in the scheme.
Your levy is calculated as: (your lot entitlement ÷ total scheme entitlements) × total annual budget. Lots with higher entitlements — typically larger apartments and penthouses — pay a greater share of the costs.
Lot entitlement example
| Apartment | Entitlement | Share of Costs |
|---|---|---|
| Studio | 5 | Smaller share |
| 1-bedroom | 7 | Moderate share |
| 2-bedroom | 10 | Larger share |
| Penthouse | 20 | Largest share |
Example only. Actual lot entitlements are set when the strata plan is registered and vary by scheme.
Example calculation
Consider a 20-lot building with a total scheme entitlement of 200. The annual budget breaks down as:
| Fund | Annual Total |
|---|---|
| Admin fund | $60,000 |
| Capital works fund | $40,000 |
| Total levy | $100,000 |
A 2-bedroom apartment with a lot entitlement of 10 would pay:
| Calculation | Result |
|---|---|
| Share of costs (10 ÷ 200) | 5% |
| Annual levy (5% × $100,000) | $5,000 |
| Quarterly levy | $1,250 |
Factors that affect how much strata fees cost
Building height and complexity
High-rise buildings have more complex systems — lifts, pressurised water systems, fire safety equipment — that require specialised maintenance contracts and compliance inspections. This pushes the admin fund budget higher compared to low-rise buildings.
Number of lots
Smaller strata schemes spread fixed costs across fewer owners. A 10-lot building with a $100,000 budget costs each owner $10,000 annually on average; a 100-lot building with the same budget costs each owner $1,000 on average. Fewer lots means higher fees per unit.
Amenities
Every shared facility adds ongoing costs. A building with a pool, gym, sauna, and concierge desk can easily have an admin fund three to four times higher than a comparable building with no amenities — all of which flows through to higher strata fees.
Building age and condition
Older buildings typically have higher maintenance costs and require larger capital works fund contributions because more major works are approaching in the 10-year plan. Newer buildings may have lower fees initially but should still be building reserves for future works.
Building insurance
Building insurance is often the single largest line item in the admin fund. Insurance premiums have risen significantly in Australia in recent years, particularly in flood-prone, cyclone-prone, or high-rise buildings. Premium increases directly increase strata fees.
Special levies
If the capital works fund is underfunded and major works are required, the owners corporation may raise a special levy — a one-off charge in addition to normal quarterly levies. Buildings with well-funded capital works plans avoid this.
Special levies
A special levy is an additional one-off charge raised outside the normal quarterly levy cycle. Special levies are approved at a general meeting and are used to fund unexpected or emergency expenses that the existing funds cannot cover.
Common reasons a special levy is raised:
- Emergency repairs: storm or fire damage, sudden structural failure, or urgent safety works
- Underfunded capital works: when major works are due but the capital works fund has insufficient reserves
- Defect rectification: construction defects in newer buildings requiring remediation
- Insurance shortfall: a large unexpected rise in the insurance premium that exceeds the budgeted amount
State terminology: strata vs body corporate
The same calculation process applies across Australia, but terminology varies by state:
- NSW, ACT, WA: strata levies, admin fund, capital works fund, lot entitlement
- Victoria: owners corporation fees, maintenance fund, capital works fund, lot entitlement
- Queensland: body corporate levies, administrative fund, sinking fund, lot entitlement
Want to estimate your strata fees?
Our calculator estimates quarterly strata levies based on property type, location, building age, and the amenities in your building.
Use the Strata Fee Calculator →Frequently asked questions
Related guides
What Do Strata Fees Cover? →
Understand admin fund expenses, capital works, insurance, and special levies.
Average Strata Fees in Australia →
See typical levy ranges by state, property type, and building size.
Strata Fees in Sydney →
Sydney benchmarks for apartments, townhouses, and luxury buildings.
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