Line 03 of 07 · Levies and the budget
Levies and the budget
Levies in an NSW strata scheme come from a budget the owners vote on at the annual general meeting, and more than 50% of owners must vote in favour of the proposed levy amount for it to be approved. Each lot is then charged according to its unit entitlement, and the strata manager may work out the amounts and send the notices, but it can’t set levy amounts.
General information. This page explains NSW strata law in plain words. It is not legal or financial advice. NSW Fair Trading’s strata pages hold the current rules, and a solicitor can advise on a particular scheme.
From budget to levy notice
Every strata scheme must set a budget each year: an estimate of the year’s expenses that works out the levies owners are charged, and when they are paid. It must take into account the goals and expenses in the scheme’s 10-year capital works fund plan. The strata committee agrees on the budget first, then it must be shown to and approved at a meeting of the owners.
The agenda for the AGM, sent at least 14 days ahead, must include a motion to accept the financial statements, including the estimated levies for the next year. On budget and levy votes, a lot’s mortgagee, such as a bank, can cast a priority vote that takes precedence over the owner’s.
After the meeting, the treasurer or the strata manager works out what each owner pays, based on unit entitlement. Unit entitlement is the lot’s share of the scheme, shown on the strata plan: a higher entitlement carries more voting power and higher levies.
A worked example
The scheme and its figures are made up to show the method Fair Trading describes: the year’s levy total is divided by the scheme’s total unit entitlement, and each lot pays that amount for every unit of entitlement it holds.
A 15-lot scheme has a total unit entitlement of 150, and its approved budget needs $60,000 in levies for the year. $60,000 ÷ 150 = $400 for each unit of entitlement.
| Lots | Unit entitlement each | Levy for the year, each lot | Each quarter |
|---|---|---|---|
| 6 lots | 8 | $3,200 | $800 |
| 6 lots | 10 | $4,000 | $1,000 |
| 3 lots | 14 | $5,600 | $1,400 |
| Scheme total | 150 | $60,000 | $15,000 |
Quarterly is the usual rhythm, though each scheme decides how often levies are paid. Fair Trading adds that owners can also pay the year’s amount weekly or fortnightly, so long as the final instalment lands by the due date.
Notice periods and interest
The minimum periods below are as Fair Trading states them, as at October 2026.
| Situation | Minimum | What the rule says |
|---|---|---|
| Standard levy, and any special levy | 30 days | An owner must receive at least 30 days to pay. |
| Special levy for emergency repairs | 14 days | For repairs needed to deal with a serious and imminent threat to residents’ health or safety, written notice with at least 14 days to pay. |
| Before debt recovery action | 30 days | Written notice, such as a letter of demand, before action in the Tribunal or a court. |
| After a Statement of Claim | 28 days | Before further legal action can be taken. |
| Interest on unpaid levies | 10% a year | Simple interest, charged when levies are not paid within one month of the due date. The owners corporation can’t raise or lower the rate, but can vote to charge none. |
Levies are still owed when a notice goes astray: Fair Trading says an owner who hasn’t received a levy notice is still legally required to pay, and that owners are responsible for keeping their contact details on the strata roll up to date. Every levy notice must come with a Financial Hardship Information Statement, or include its information, which gives the contact details of the National Debt Helpline.
Payment plans, by the standard form
Since 27 October 2025, an owner asking for a payment plan for overdue levies must use a standard form. A plan runs for up to 12 months, another can be agreed after it ends, and it can’t cover future levies. The request is decided by a vote of the owners corporation or the strata committee, never by the strata manager alone.
The owners corporation or committee must consider the request, must not resolve to refuse all payment plans, must not charge a fee for asking or for the plan, and must reply in writing within 28 days, with reasons if it refuses. A refusal can be reasonable where the plan would leave the scheme’s funds short; an owner who thinks a refusal unreasonable can seek Fair Trading mediation or a Tribunal order.
While a plan is in place and being followed, no action can be taken to recover the levies it covers. Payments go first to the overdue levies, oldest first, then to interest, then to recovery costs, unless a court or Tribunal order, or the owner, says otherwise.
Insurance in the budget
Strata insurance is mandatory in NSW, and insurance is one of the costs levies pay for. When a strata manager arranges it, the manager must provide at least three separate quotations, or tell the owners corporation in writing if three can’t be obtained. Each quote must be itemised, and the article on commissions and disclosures sets out what that means.
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