An apartment’s advertised levy can look manageable while a major project remains only partly funded. This guide helps buyers connect planned works to the money available, the lot’s possible contribution and the questions to resolve before committing. It does not assess an individual scheme or recommend a repair budget.
What is a special levy, and how is it different from the capital works fund?
A special levy is an additional contribution the owners corporation can approve when existing funds do not cover expenses, such as major repairs. NSW Government says it must be introduced at a general meeting, and is allocated using each lot’s unit entitlement, as annual levies are. Ask for the decision and payment schedule; discussion of possible works is not itself a levy notice.
The capital works fund is the scheme’s reserve for capital expenses, including major common-property repairs and replacements. It was previously called the sinking fund. The administrative fund covers day-to-day expenses. A special levy is a way of raising money; a capital works fund is where money is held for particular purposes.
For a buyer, the useful question is how identified work connects to available funds, approved contributions and payment dates. A large bank balance or a low advertised quarterly levy does not answer that question on its own.
Read the plan, budget and latest decisions together
NSW Government’s finance guidance describes a 10-year capital works plan that must be reviewed at least every five years. New and revised plans must use the standard form. Some two-lot schemes have an exemption from needing a capital works fund; ask your adviser which requirements apply before treating an absent fund as a defect.
The official capital works planner guidance includes costs, the years work is expected, contingency and assumed building-cost inflation. For a plan you are reviewing, ask what supports those assumptions and whether recent quotes or technical reports change them. A completed template does not independently verify building condition or the eventual price of repairs.
- Record the plan’s preparation date, last review and the years it covers.
- Match each major project to its scope, estimate or quote, planned timing and latest decision.
- Compare expected contributions in the plan with the contributions actually approved in the current budget.
- Ask how unpaid levies, other committed spending and project payments affect the money available when it is needed.
- Identify works whose scope or cost is unresolved; do not give an unknown item a zero-dollar allowance.
For the broader document search, use the strata-report reading guide. This page focuses on funding and buyer budget questions. NSW’s buyer guidance warns that low levies can be followed by increases or special levies; it does not provide a universal “safe” fund balance or quarterly fee.
Turn each proposed project into a funding question
| What the records show | What to ask next |
|---|---|
| A project appears in the 10-year plan | Is the scope still current? What date and assumptions support the estimate? |
| Minutes say quotes will be obtained | Have quotes arrived, what do they include, and has a scope or contractor been approved? |
| Works are approved | Which funds or contributions will pay for them, and when are project payments due? |
| A special levy is approved | What total was resolved, how is this lot’s share calculated, and what are its instalment dates? |
| Borrowing is proposed or approved | What loan terms, fees and repayment obligations need review, and how do they affect future levies? |
| Works are said to be complete | What completion records, final costs, outstanding invoices or follow-up works remain? |
NSW Government lists instalments and strata finance among possible funding approaches. An instalment schedule changes timing; borrowing introduces its own costs and obligations. Ask for the actual proposal or agreement rather than assuming either option removes the expense. The choice needs review for the particular scheme.
Worked example: a fund balance is not all available cash
Illustration only: the following numbers are invented to demonstrate a funding-gap calculation. They are not a repair quote, a recommended reserve or evidence about any Sydney building. Assume the stated project cost includes all costs for this simplified example, the existing commitment is separate, and no other income, spending, borrowing or recovery will change these figures before payment is due.
| Illustrative item | Amount and calculation |
|---|---|
| Project cost | Assumed total of $240,000. |
| Capital works fund balance | $90,000 at the example’s starting date. |
| Already committed to other works | $30,000, assumed payable before this project. |
| Available for this project | $90,000 − $30,000 = $60,000. |
| Remaining funding gap | $240,000 − $60,000 = $180,000. |
| Hypothetical lot share | 30 out of 1,000 total unit entitlements: 3%. |
| If the whole gap is raised by a special levy | $180,000 × 30 ÷ 1,000 = $5,400 for that lot. |
| If two equal instalments are approved | $5,400 ÷ 2 = $2,700 per instalment. |
NSW guidance bases special levies on unit entitlements. The hypothetical $5,400 therefore assumes the whole $180,000 gap is approved as that levy and the stated entitlement applies. It is not automatically the amount a buyer must pay. Check the actual resolution, notice, title information and contract with your conveyancer. Do not divide by the number of apartments unless equal entitlements are established.
In a real scheme, have the strata manager or report author reconcile the figures without double-counting invoices or commitments. A new contribution, a changed quote or a different payment date can change the result. Keep uncertain funding, such as a possible insurance recovery, separate from money confirmed as available.
Who pays if a special levy falls around settlement?
Have your solicitor or conveyancer review the sale contract, levy resolution, notice, instalment dates and current certificate together. Ask them to explain the allocation between buyer and seller, any settlement adjustment and what changes if a new resolution or notice arrives before settlement. The advertised levy figure alone cannot establish your payment responsibility.
The NSW buyer guide says a section 184 certificate provides information including levies, outstanding levies for the lot and proposals for funding the 10-year plan. Ask for a current certificate and an explanation of any difference from the strata report or later minutes. This article does not state a blanket rule that every special levy belongs to either the buyer or seller.
Use the contract-review checklist to record any requested clarification or amendment. Keep proposed terms separate from agreed terms. Ask your adviser to identify exactly which wording and documents support the amount and dates you are putting into your purchase budget.
Keep a levy and works decision sheet
Use one entry for each substantial project or approved levy. This original worksheet is designed for your discussions with the strata searcher, manager and legal adviser; keep private records with the professionals who need them.
- Project: record the work, document reference, date and whether it is proposed, approved or completed.
- Cost: identify the quote or estimate, what it includes, contingency and items still uncosted.
- Funding: record the relevant fund, available amount, existing commitments and any proposed levy or borrowing.
- Lot: record the unit entitlement, approved lot amount and instalment dates, distinguishing calculated scenarios from actual notices.
- Purchase: record your conveyancer’s advice on allocation, adjustments and information needing an update before settlement.
- Next step: name the person responsible, evidence still needed and the date you need the answer.
Put confirmed costs in the right part of your buying budget
Separate ongoing ownership costs, confirmed amounts relevant to your purchase and unresolved scenarios. Put only the appropriate confirmed purchase costs into the upfront buying costs calculator, alongside your other itemised expenses, and count each amount once. Keep future regular levies and longer-term scenarios in a separate ownership budget.
For a purely hypothetical calculator exercise, adding the example $5,400 once to your other upfront costs increases the calculator total by $5,400. That arithmetic does not decide whether the levy is yours or when it is due. The calculator does not forecast strata works, assess a scheme’s solvency or produce the final settlement statement.
A technical specialist should explain building condition and repair scope; your legal representative should explain transaction obligations. If an essential cost or document remains unresolved, ask how that uncertainty affects your decision before committing. Use the property-checks collection and buying-costs collection to organise those separate tasks.
If you want help coordinating your Sydney search, ask a buyers agent which document follow-ups their service includes. You can request an introduction with no charge to enquire and no obligation to engage. Baxau may receive a referral fee negotiated case by case; read how matching works.