Introduction

Living in a strata-titled property in New South Wales involves contributing financially to the upkeep and management of shared spaces through strata levies. These regular payments, typically determined annually by the owners corporation based on unit entitlements, fund the maintenance, repairs, and operational costs associated with the common property, ensuring the scheme functions effectively.

Occasionally, owners may find their strata levies, including standard contributions or special levies raised for specific purposes, to be unexpectedly high, leading to concerns about fairness and justification. This guide explores the factors that can contribute to high strata levies and outlines the processes available under the Strata Schemes Management Act 2015 (NSW), which was significantly updated by the Strata Schemes Legislation Amendment Act 2025 (NSW). This allows owners to query, challenge, and resolve strata disputes regarding levy amounts in NSW.

Understanding Strata Levies

Property owners within a strata scheme are required to pay an annual levy, also referred to as a contribution or fee. This payment funds maintenance and repair of common property areas and covers the running costs associated with these spaces.

The amount and frequency of levies are determined by the budget, which outlines total levy charges and specifies the payment schedule:

• Quarterly
• Annually

Levies are calculated based on each property’s unit entitlement, reflecting the owner’s share within the scheme. For example:

• A smaller apartment may have a unit entitlement of 10.
• A larger apartment might have a unit entitlement of 15.

Consequently, owners with higher unit entitlements wield greater voting power within the owners corporation and are subject to higher levy payments.

Levy rates and any increases require approval by the owners corporation during the annual general meeting (AGM). Additionally, the strata committee can propose a special levy when standard levies fail to cover significant expenses, such as major repair works. Introducing a special levy similarly requires approval at a general meeting, following the procedural steps established for annual levies.

Both annual and special levies are calculated according to each property owner’s unit entitlement. In cases of emergency repairs necessary to address a serious and immediate risk to residents’ health or safety, the owners corporation must:

• Issue written notice of the required levies.
• Provide a minimum of 14 days’ notice for payment.

This ensures all property owners are adequately informed and have sufficient time to meet their financial obligations towards the upkeep and safety of the common property.

For new strata schemes, developers now have stricter obligations. Under the Strata Schemes Legislation Amendment Act 2025, they must provide initial levy estimates and a maintenance schedule that have been independently certified by a qualified surveyor before the first Annual General Meeting. This provides new owners with a more reliable forecast of future costs.

Reasons for High Strata Levies 

The cost of strata levies can vary significantly based on several factors, such as amenities, building age, and condition. Consequently, some property owners may face higher fees. Below are key reasons why levies might be high:

• Facilities and Building Age: Properties with extensive amenities or older structures often incur higher fees.
  • Older buildings typically require more frequent repairs and maintenance, increasing costs for owners.
  • Such properties are more likely to necessitate special levies to cover unexpected expenses.
• Strata Management Efficiency: The proficiency and transparency of the strata management team directly affect levy rates. Incompetent management can lead to unnecessary wastage, while adept managers implement cost-saving practices. Under the Strata Managing Agents Legislation Amendment Act 2024 (NSW), which commenced in February 2025, strata managers now have a legal duty to disclose any financial connections with suppliers and provide detailed breakdowns of costs like insurance premiums, including any commissions they receive. This transparency allows owners to see exactly where their money is going and challenge costs that may be inflated by hidden fees or conflicts of interest.
• Mismanagement Consequences: Poorly managed schemes risk fines, penalties, and a decrease in market value. As a result, the investment value for owners can decline, highlighting the importance of competent management.
• Frequent Special Levies: Regular imposition of special levies may indicate underlying management or planning issues. These levies typically cover significant, unforeseen expenses—such as major repairs or legal costs. If they become commonplace, it could signal a failure to plan for maintenance and future needs.

To manage high strata levies, property owners should closely examine their scheme’s management practices. Ensuring efficient management can help control costs and maintain or enhance the long-term value of their investment.

A New Approach to Resolving Levy Disputes in NSW

The Strata Schemes Legislation Amendment Act 2025 (NSW) introduced a new framework for resolving levy disputes that prioritises support for owners and negotiation before formal action.

Step 1: Check for Financial Hardship Support

Recent changes to strata law recognise the financial pressures on owners. Owners corporations are now required to consider all requests for payment plans from owners experiencing financial hardship. Blanket policies refusing payment plans are no longer permitted. Later in 2025, levy notices must also include a “Financial Hardship Information Statement” directing owners to free support services like the National Debt Helpline. If you are struggling to pay, your first step should formally be to request a payment plan.  

Step 2: Verify the Levy’s Legality and Gather Evidence

If you believe a levy is unjustified, you can take steps under the Strata Schemes Management Act 2015 (NSW). First, confirm the levy was imposed correctly according to Division 2 of the Act. Crucially, the 2025 reforms extended the notice period for taking legal action to recover unpaid levies from 21 to 30 days. Next, gather evidence. If a special levy is for major repairs, investigate the building’s maintenance history. The time limit for an owner to claim damages when an owners corporation fails to repair common property (a section 106 claim) has been extended from two to six years. If the repairs are needed due to long-term neglect, this can be powerful evidence that the levy is unreasonable.  

Step 3: Approach the NSW Civil and Administrative Tribunal (NCAT)

Where internal resolution fails, you may need to prepare a meticulous application for a strata dispute in NCAT. Under Section 87 of the Strata Schemes Management Act 2015 (NSW), the Tribunal can adjust levies it finds to be excessive or inadequate.

However, it is important to understand that NCAT is not a court of general fairness. As confirmed in the case of Quo Warranto Pty Ltd v Goodman [2022] NSWCATAP 315, you must demonstrate a valid legal reason for your challenge, not just a feeling that the levy is unfair. When making its decision, the Tribunal will evaluate the original factors, but will now also consider whether the owners corporation’s decision was reasonable in all circumstances, including whether it unreasonably refused a payment plan request. The onus remains on you to prove the levy is unreasonable, and proceedings can be complex.

Practical Tips to Pay Lesser Strata Levies 

To effectively lower strata levies, property owners and Owners Corporations can adopt several strategic approaches. Here’s a concise guide to these strategies:

Optimise Strata Insurance

Strata insurance is a major expense. The Strata Managing Agents Legislation Amendment Act 2024 (NSW) now gives you the power to demand transparency. Strata managers must provide detailed breakdowns of insurance quotes, clearly stating the base premium, government charges, and any commissions or fees they will receive. You can use this information to compare costs and ensure you are getting value. Furthermore, if the owners corporation obtains its insurance quotes and arranges payment, the strata manager is legally banned from receiving a commission on that policy.

Legally Enforce Your Right to Embrace Sustainability

Sustainability initiatives offer dual benefits of environmental responsibility and financial savings. Moreover, sustainability initiatives can lead to significant long-term savings. The Strata Schemes Legislation Amendment Act 2025 now prohibits strata by-laws that restrict the installation of sustainability infrastructure (like solar panels or EV chargers) based only on appearance, unless the property is heritage-listed. This removes a major barrier to cost-saving upgrades. Furthermore, numerous government rebates are available in 2024-2025 to reduce upfront costs, including:  

Prioritise Preventative Maintenance

A well-implemented preventative maintenance program is key to prolonging the lifespan and efficiency of a building’s critical infrastructure.

Regular maintenance ensures systems run optimally, reduces the frequency of breakdowns, and minimises inconvenience and potential costs for residents.

To achieve additional cost savings, consider the following measures:

• Off-peak scheduling: Operate energy-consuming appliances (e.g., pumps, heating, ventilation, and air conditioning (HVAC) systems) during off-peak hours.
• Energy-efficient upgrades: Install systems such as motion-sensor lighting or high-efficiency HVAC units.

By adopting these strategies, strata schemes can significantly reduce common area electricity bills over time.

Carefully Draft By-laws to Recover Specific Costs

For years, strata by-laws allowing an owners corporation to recover specific costs from an individual owner (e.g., for causing a false fire alarm) were often found to be unenforceable.

However, the NCAT Appeal Panel decision in Gokani-Robins Pty Ltd v The Owners – Strata Plan No. 77109 [2025] NSWCATAP 107 has provided a new pathway for their validity. A cost-recovery by-law may now be enforceable if it follows the correct principles of strata by-law drafting to ensure the owner’s rights are protected. Crucially, the by-law must state that the owners corporation can only recover the costs after the owner’s liability and the reasonableness of the amount have been determined by a court or tribunal.

This prevents the owners corporation from being the sole judge and ensures due process. Expert legal advice is essential to draft an enforceable by-law.  

Avoid the ‘Lazy Tax’ with New Unfair Contract Protections

Regularly reviewing service provider contracts is essential. A powerful new tool to combat the ‘lazy tax’ is now available. As of 1 July 2025, the Strata Schemes Legislation Amendment Act 2025 extends consumer protections against unfair contract terms to strata schemes.

This means that for any standard form contracts (like those for strata management, cleaning, or lift maintenance) entered into, renewed, or changed after this date, any unfair terms are banned. Unfair terms can include things like automatic renewals, excessive penalties, or one-sided clauses that limit the provider’s liability. This gives your owners corporation significant new power to challenge and renegotiate long-term agreements to ensure you are getting fair value.

Conclusion: Need More Help? We’re Here for You

Strata levies are essential for the upkeep of shared spaces, but high rates can present challenges for property owners. Understanding how levies are calculated, the reasons for potential increases, and the avenues for dispute resolution is key to managing your financial obligations within a strata scheme. Exploring cost-saving strategies like optimising insurance, embracing sustainability, and prioritising maintenance can also help mitigate high costs.

Navigating levy disputes or implementing cost-saving measures can be complex. If you believe levies are unreasonable or require assistance understanding your rights and options, it is advisable to seek professional legal advice. Contact PBL Law Group’s expert strata lawyers today for guidance tailored to your strata levy concerns.

Frequently Asked Questions (FAQ)