Strata Fees Explained: What You Pay, What's Included & Red Flags

14 March 2026|5 min read

A complete guide to strata fees in Australia. Covers what they pay for, average costs by city, capital works vs admin funds, red flags in strata reports, and how strata affects your borrowing power.

What strata fees cover and why you pay them

Strata fees — also called body corporate fees, owners corporation fees, or strata levies — 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. When you buy an apartment, townhouse, or villa in a strata scheme, you own your individual lot but share ownership of common property such as lobbies, lifts, stairwells, gardens, pools, gyms, car parks, roofing, and external walls. The strata fees fund the maintenance and insurance of these shared areas. Typical items covered include building insurance (the single largest component, often 30% to 50% of total levies), cleaning of common areas, gardening and landscaping, lift maintenance and servicing, swimming pool upkeep and compliance, fire safety equipment inspections and maintenance, lighting in common areas, strata management company fees, and building management or caretaker salaries in larger complexes. The 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. 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.

Average strata fees by city: what to expect in 2026

Strata fees vary enormously depending on the city, building type, age, and facilities. As a rough guide for 2026, average quarterly strata fees are: Sydney $1,500 to $3,000 for a standard two-bedroom apartment (luxury buildings with concierge and pools can exceed $5,000), Melbourne $1,200 to $2,500, Brisbane $1,000 to $2,000, Perth $800 to $1,800, and Adelaide $700 to $1,500. Smaller complexes of 6 to 12 units generally have lower fees because there are fewer common facilities and less management overhead, though the insurance cost is shared among fewer owners. Large complexes with lifts, pools, gyms, and concierge services have the highest fees but spread costs across more owners. Age of the building is a major factor — newer buildings often have lower initial fees that increase as the building ages and maintenance requirements grow. Heritage buildings and those with older lifts, plumbing, or waterproofing systems can have very high fees due to ongoing repair costs. When budgeting for an apartment purchase, always factor strata fees into your holding costs alongside mortgage repayments, council rates, and water — they are a significant ongoing expense that can increase each year. A $3,000 quarterly strata fee adds $12,000 per year to your property costs.

Capital works fund vs administrative fund: the two buckets

Strata fees are typically split into two separate funds with distinct purposes. The administrative fund (also called the operating fund) covers day-to-day running costs — cleaning, gardening, insurance premiums, management fees, utilities, and routine maintenance. This fund is spent each year on recurring expenses and is replenished by quarterly levies. The capital works fund (also called the sinking fund) is a reserve fund that accumulates over time to pay for major repairs and replacements — things like repainting the building exterior (every 10 to 15 years), 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, projecting future major expenses and setting levy contributions to ensure the fund can cover them. A well-managed building has a healthy capital works fund with sufficient reserves to cover upcoming major works. A poorly managed building may have an underfunded capital works fund, which inevitably leads to special levies — one-off payments demanded from all owners to cover shortfalls. Special levies can run from $5,000 to $50,000 or more per owner for major works like facade remediation or structural repairs. Always check the capital works fund balance and the 10-year plan before purchasing a strata property.

Red flags in strata reports: what to watch for before buying

Before purchasing any strata property, you should obtain a strata report (also called a strata search or body corporate records search) from the owners corporation or a strata search company. This report reveals the financial and governance health of the building and can expose problems that are not visible during a property inspection. Key red flags include: a low or depleted capital works fund relative to upcoming major works identified in the 10-year plan, indicating special levies are likely. Active or pending litigation — if the owners corporation is involved in legal disputes (particularly building defects claims against the developer), these can drag on for years and result in special levies to fund legal costs. A history of special levies in recent years suggests ongoing funding problems. Outstanding levies owed by other owners — if many lots are in arrears, the scheme may struggle to meet its financial obligations. Water damage, cracking, or structural reports flagged in meeting minutes. Restrictions on short-term letting (such as Airbnb) that may affect your plans for the property. High management fees compared to similar buildings. Excessive by-laws that restrict pet ownership, renovations, or use of common facilities. By-law compliance issues or disputes between owners that indicate a dysfunctional owners corporation. Budget $300 to $500 for a professional strata report — it is one of the most cost-effective due diligence steps you can take and has saved countless buyers from purchasing into problem buildings.

How strata fees affect your borrowing power and serviceability

Strata fees have a direct impact on how much you can borrow because lenders include them in their serviceability assessment alongside your mortgage repayments, insurance, council rates, and living expenses. When a bank calculates your borrowing capacity, it deducts your estimated or actual strata fees from your income, reducing the amount of mortgage repayment you can support. 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 assessment methodology. This means that two otherwise identical apartments at the same price — one with $2,000 quarterly strata fees and another with $4,000 — may result in different borrowing outcomes. The apartment with higher strata fees requires either a higher income or a larger deposit to achieve the same loan amount. Some lenders are more conservative than others in how they treat strata fees, so shopping around can help. When comparing apartments, calculate the total monthly cost including mortgage repayments plus strata fees — a cheaper apartment with high strata fees may end up costing more each month than a slightly more expensive apartment with lower fees. Use our Borrowing Power Calculator to see how different expense levels affect your maximum loan, and our Mortgage Calculator to model total monthly costs including strata levies.