Buying a property in Australia is one of the biggest financial decisions you’ll ever make. And if you’re eyeing an apartment, townhouse, or villa, there’s one ongoing cost that deserves your full attention before you sign any contract: strata fees.
Also known as body corporate fees or owners corporation fees, strata fees are quarterly or monthly payments made by all owners in a strata-titled property to cover the shared costs of maintaining the building and common areas. Across Australia, these fees typically range from $550 to $2,500 per quarter, though they can climb considerably higher depending on the building’s location, age, and amenities.
For many buyers, strata fees are an afterthought. But they shouldn’t be. They directly affect how much you can borrow, as lenders include them in their serviceability assessment alongside your mortgage repayments, council rates, and living expenses.
This guide breaks down exactly what strata fees cover, how they’re calculated, and what to look out for before you buy.
What Strata Fees Cover
Understanding where your strata fees actually go is the first step to knowing whether you’re getting good value. In Australia, strata fees are split across two separate funds: the admin fund for day-to-day operating costs, and the capital works fund for major future repairs and replacements. On top of these, a third type of charge, the special levy, can arise when neither fund has enough to cover an unexpected expense. Here’s a breakdown of what each covers.
Building Insurance
Building insurance is typically the single largest component of strata fees, often accounting for 30% to 50% of total levies. Strata schemes are required by law to have building insurance, which covers damage to the building itself as well as common property. Note that this does not cover your personal contents. That’s a separate policy you’ll need to organise yourself.
Day-to-Day Maintenance & Cleaning
The administrative fund covers day-to-day running costs such as cleaning, gardening, insurance premiums, management fees, utilities, and routine maintenance. This fund is replenished by quarterly levies and spent on recurring expenses throughout the year. Think hallway cleaning, lawn mowing, and minor repairs to shared spaces.
Utilities for Common Areas
Strata fees cover utilities for common areas, including electricity for lighting hallways and car parks, water for gardens and swimming pools, and gas for communal heating or cooking facilities. It’s worth noting that utilities within your own unit (your power, gas, and water) are generally your own responsibility unless there’s a shared meter arrangement.
Shared Amenities
If your building has a gym, swimming pool, lift, or other shared facilities, the ongoing maintenance and compliance costs for these are covered by your strata fees. Properties with amenities such as swimming pools, gyms, or lifts tend to have higher strata fees to cover the increased cost of maintenance and repairs. This is one of the biggest reasons why fees vary so much from building to building.
Professional Management & Administration
Strata fees also cover administration costs for managing the strata scheme, including the strata manager’s salary, legal fees, and office expenses. The strata manager handles everything from coordinating tradespeople to organising the Annual General Meeting (AGM), where the budget is approved each year.
Capital Works Fund (Sinking Fund)
The capital works fund, also called the sinking fund, is a reserve that accumulates over time to pay for major repairs and replacements, such as repainting the building exterior, replacing the roof, lift refurbishment, waterproofing remediation, and car park resurfacing. By law in most states, strata schemes must have a 10-year capital works fund plan prepared by a qualified professional.
Special Levies
A well-managed building has a healthy capital works fund with enough reserves to cover upcoming major works. A poorly managed one may have an underfunded capital works fund, which can lead to special levies, one-off payments demanded from all owners to cover shortfalls. These can run from $5,000 to $50,000 or more per owner for major works like facade remediation or structural repairs. Always check whether any special levies are planned before you buy.
How Strata Fees Are Calculated
Strata fees aren’t arbitrary. They follow a structured process that every Australian strata scheme uses. The calculation combines the building’s annual operating budget, a long-term capital works plan, and each lot’s unit entitlement, which is a number that determines your proportional share of the total costs. Here’s how each piece of the puzzle fits together.
Step 1: The Annual Budget Is Set at the AGM
Fees are set annually at the Annual General Meeting (AGM) of the owners’ corporation, based on a budget prepared by the strata committee or strata manager. This budget must show the current financial situation of the strata scheme and any estimates of payments to be made and received between that AGM and the next. It must be distributed to members alongside the notice of the AGM, discussed at the meeting, and then approved by a majority vote. It’s worth attending your building’s AGM. This is where you have a direct say in how your money is spent.
Step 2: Your Unit Entitlement Determines Your Share
Each owner’s share is determined by their unit entitlement, a number assigned to each lot based on its relative value, which determines your voting power and your proportion of shared costs. Typically, someone in a larger home, like a three-bedroom unit, will pay higher strata fees than someone in a one-bedroom unit in the same building. Likewise, units with panoramic views usually come with higher fees than smaller, ground-floor units in the same complex.
Step 3: The 10-Year Capital Works Plan Is Factored In
Alongside the annual budget, the owners’ corporation must maintain a 10-year capital works plan, which is required by law in most Australian states. This plan projects the major expenses coming up over the next decade (things like roof replacements, lift upgrades, and exterior repainting) and sets the level of capital works contributions needed to fund them without resorting to surprise special levies.
Amenities Push Fees Higher
The facilities your building offers have a significant impact on your fees. 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. Adding a pool, gym, lift, and concierge to a building increases fees by as much as 105%. If keeping costs down is a priority, opting for a building with fewer shared facilities is one of the most effective ways to do it.
Building Age Matters
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. Be cautious of a new development with very low fees. Strata fees for new developments typically average 20% higher than initially advertised during “honeymoon periods.”
Location Plays a Role
Where your building sits in Australia also influences what you’ll pay. Sydney has the highest average strata fees in Australia, driven by higher insurance costs, premium high-rise buildings, and a higher proportion of older strata stock requiring greater maintenance. As a rough guide for 2026, average quarterly strata fees for a standard two-bedroom apartment are $1,500–$3,000 in Sydney, $1,200–$2,500 in Melbourne, $1,000–$2,000 in Brisbane, $800–$1,800 in Perth, and $700–$1,500 in Adelaide.
Fees Will Increase Over Time
It’s important to budget for rising strata fees, not just today’s rates. Strata fees tend to increase over time as property values rise and maintenance costs and demands grow. At a 5% annual increase rate, fees double in roughly 15 years, something worth factoring into your long-term financial planning before you buy.
What to Look Out for Before You Buy
Buying into a strata scheme without doing your homework is one of the costliest mistakes a property buyer can make in Australia. The good news is that most risks are entirely avoidable if you know what to look for. Here’s your pre-purchase checklist.
Get a Strata Report (Without Exception)
A strata report is the document that tells you what condition the shared property is in and how well the owners corporation is managing it. You order one from a strata search company before you exchange contracts, and it pulls together three to five years of records from the strata manager: meeting minutes, financial statements, by-laws, insurance, repair quotes, and any legal disputes. A professional strata report typically costs between $300 and $500, a small price to pay for the protection it offers.
Check the Financial Health of Both Funds
The financial health of the building matters just as much as your own loan pre-approval. Check whether the administrative fund and the capital works fund are healthy and whether they match the 10-year capital works forecast. Also, check whether any special levies are proposed or have recently been raised. A building with low levies but an empty capital works fund is a trap.
Review the Building’s Maintenance History
Scan for signs of a proactive versus a reactive building. Red flags include repeated mentions of leaks, water ingress, or cracked tiles in meeting minutes. Well-run buildings stay ahead of problems; poorly run ones leave issues to escalate, costing you later. A building’s maintenance track record is one of the clearest indicators of how it will be managed after you move in.
Look at the Strata Committee’s Track Record
The meeting minutes tell you a lot about how the building is governed. Look for a stable, active committee with clear communication. If the committee appears unresponsive or combative, that’s a red flag. A dysfunctional committee can lead to delayed maintenance, governance disputes, and ultimately, a decline in property value.
Check for Ongoing Legal Disputes
Before you buy, verify whether the owners’ corporation is involved in any legal action. Special levies can arise to cover litigation costs if the body corporate becomes involved in legal disputes. Legal battles can drag on for years and result in unexpected financial demands on all lot owners (including you).
Read the By-Laws Carefully
As a strata property owner, there are rules and restrictions you’ll need to adhere to, such as noise control, rules around pets, parking, where you can hang your washing, and even renovation restrictions. Each strata scheme operates under its own set of by-laws. Review these before signing anything to ensure you’re comfortable with how the building is run. What’s allowed in one building may be prohibited in another.
Factor Strata Fees into Your Borrowing Power
Many buyers overlook the impact strata fees have on their finances beyond the quarterly bill. Strata fees have a direct impact on how much you can borrow because lenders include them in their serviceability assessment. For example, if strata fees are $4,000 per quarter ($16,000 per year), that reduces your annual surplus income by $16,000, which could lower your maximum borrowing capacity by $100,000 to $150,000, depending on the interest rate and lender methodology.
Use a Strata-Specialist Conveyancer
Not all conveyancers are equally equipped to assess strata documents. Consider engaging a strata-specialist conveyancer, one who specifically reads strata reports for a living. They’ll spot things you won’t. If you find building defects, upcoming special levies, or a low fund balance, you can use these as leverage to negotiate a lower purchase price or ask the seller to address issues before settlement.
Strata Fees in Australia: Key Takeaways Before You Buy
Strata fees are a normal and necessary part of owning an apartment, townhouse, or villa in Australia, but they should never be an afterthought. Understanding what you’re paying for, how your fees are calculated, and what to scrutinise before signing gives you a significant advantage as a buyer.
The golden rule? Never skip the strata report. A few hundred dollars spent on due diligence today could save you tens of thousands down the track, and give you the confidence to buy smart.
Ready to Buy Smarter? Get Help Reviewing Strata Fees
Strata fees can make or break a property decision, which is why working with a buyer’s agent can be invaluable. Our buyer’s agents at Moove conduct independent due diligence, review strata reports, flag red flags early, and help you avoid buildings with hidden financial risks. The right advice upfront can save you tens of thousands later.
Talk to us now for professional guidance.
