How Property Type Affects Your Strata Levies

If you're living in a strata environment, you’ll know that paying levies is all part and parcel of it. However, many owners don’t understand how their property type affects strata levies. Whether you’re in a high-rise apartment or a separate villa under Community Title, your levies can vary based on several factors. From amenities to the building’s age, we’re going to explore some factors that influence how much you pay each year in strata levies.

What are strata levies?

Strata levies are the fees that property owners in a strata scheme must pay each year to cover a range of expenses. Levies are typically used to pay for expenses such as cleaning, gardening and minor repairs, as well as long-term maintenance like roof replacements. Strata levies also cover administrative costs, such as insurance, legal fees and professional management.

It’s important to note that these expenses relate to common or shared areas. It is still usually each lot owner’s responsibility to handle the upkeep of their own property. Managing strata fees can be a complex and thankless task, which is why many schemes prefer to use professional strata management services to ensure transparency.

How amenities affect strata levies

Every strata property comes with different amenities, and these play a key role in determining how much you pay in strata fees. For example, apartment buildings often have features like elevators, pools and gyms. Cleaning and maintaining these areas all costs money, so usually, the more amenities your property has, the more you’ll pay in fees.  

On the other hand, single villas or townhouses don’t usually have as many amenities, which means fees might be lower. Remember, this is just one factor that affects strata levies, so it isn’t a set rule that properties with impressive amenities come with higher fees.

Premium features and amenities

While there is usually a clear difference between strata levies according to the amount of amenities, there’s an even bigger difference in luxury housing. High-end properties may have additional features, such as a rooftop garden or even concierge services. Even the outside areas of a luxury property may be more expensive to maintain, so you can expect to pay higher levies.

These features are always a drawcard for buyers, but it’s important to keep the strata levies in mind. Although you may be able to comfortably buy into the scheme, you’ll need to manage the higher strata levies each and every year.

Older buildings and maintenance costs

We’ve touched on the differences between premium and regular properties, but sometimes there are exceptions to the rule. Older properties, for example, may have higher maintenance costs than a more modern building. Aside from regular upkeep, there may also be expenses related to replacing wiring, plumbing, carpets or other expensive repairs. While large, unexpected costs usually come out of a sinking fund, property owners all pay into this, too. So, just because a building is older, it doesn’t always equate to lower strata fees.

Building size and layout affect administrative costs

It’s not just maintenance and cleaning you need to consider, but also the associated administrative costs of managing a scheme. Larger buildings typically have higher admin costs, as do buildings with more individual lots. Insurance is another consideration, as the property size usually influences policy amounts. Basically, the bigger a building or scheme is, the more complex it is to run and therefore the strata levies are likely to be higher.

Sinking funds for different property types

We already mentioned that a sinking fund is typically used for unexpected expenses. Owners in a strata scheme contribute to the sinking fund too, so when buying in, you need to understand all of the levies. If a property might have significant maintenance needs in the future, sinking fund levies might be higher. Contributing to the sinking fund is a great way to stay financially prepared for emergencies, but it does mean more money coming out of your wallet each year.

Can you dispute strata levy amounts?

If you believe your strata levies are too high, you do have some options. Firstly, you could raise the matter at the Annual General Meeting (AGM) or seek advice from your current strata managers. Often, this can lead to adjustments. However, if you’re not able to address the issue through your strata manager or committee, you may need to seek further advice about your options.

Need help managing your strata levies?

Managing strata levies can be difficult for committees and managers, particularly if you don’t have a financial background. If you’re struggling with strata levies or managing your property’s finances, Strata Management SA can help. Our team of experts offers professional help with managing levies and all other financial aspects of your property. To find out how we can help, contact our friendly team today.