Understanding the financial responsibilities of owning property within a strata scheme is essential for every strata committee member, owner, or prospective buyer. With the evolving legislative landscape in New South Wales — particularly following recent reforms aimed at improving transparency, accountability, and the long-term sustainability of strata communities — it is more important than ever to have a clear grasp of how strata expenses are structured, why they exist, and how they are funded.

Following is our Strata Expense Fact Sheet which provides an up-to-date, practical overview of the key expenses associated with running and maintaining a strata scheme. It outlines the major categories of expenditure, the variables that can affect these costs — such as building size, age, amenities, and compliance requirements — and the legal framework that governs them.

What expenses do strata levies cover?

Strata fees are contributions made by lot owners to cover the maintenance and management of common property within a strata scheme. Central to strata funding are three types of levies collected from owners:

Administrative Fund Levies 

Cover day-to-day operational expenses such as cleaning, gardening, minor repairs, utilities for common areas, building insurance, and management fees.

Capital Works Fund Levies

Allocated for significant repairs and long-term maintenance projects like painting, roof replacements, and major structural repairs.

Special Levies

Imposed when unexpected or urgent expenses arise that are not covered by the existing funds, often for unforeseen repairs or legal costs.

When it comes to managing a strata property, transparency around expenses is essential. At McCormacks, we understand that no two buildings are the same — and neither are their costs. That’s why we’ve prepared this NSW Strata Expense Fact Sheet to help owners and committees understand the key categories of expenses, how they typically break down, and why they can vary so widely from building to building.

Key strata expense categories

Strata expenses are generally divided into administrative and capital works (sinking fund) costs. These are the broad categories most buildings encounter:

1. Cleaning and Waste Management

• What it includes: Routine cleaning, bin collection, waste removal, and recycling services.
• Variability: Costs are higher for high-rise or luxury buildings with daily cleaning needs, shared facilities, or waste chute systems.

2. Repairs and Maintenance

• What it includes: Ongoing maintenance of common property including lighting, plumbing, HVAC, and general building wear and tear.
• Variability: Older buildings often require more maintenance, while newer ones may benefit from lower costs during the early post-construction years and having rectification costs covered by the Defects Liability Period.

3. Utilities (Common Areas)

• What it includes: Electricity, water, and gas used in common areas (e.g. foyers, lifts, gyms, pools).
• Variability: Energy-efficient buildings with solar panels or LED lighting may see lower utility costs. Premium buildings with heated pools, air-conditioned lobbies, or 24/7 lighting will spend more.

4. Insurance

• What it includes: Strata insurance covers building replacement costs, common property, public liability, and sometimes machinery breakdown or catastrophe coverage.
• Variability: Premiums are influenced by building value, construction type, flood/fire risk zones, and recent claims history. Premium or coastal buildings typically attract higher rates. Periodic insurance valuations and proactive risk mitigation can help manage rising costs.

5. Building Management & Concierge Services

• What it includes: On-site building managers, concierge staff, and facilities coordination.
• Variability: Common in complex or high-end buildings. These services deliver operational convenience and owner satisfaction but do contribute significantly to overall cost.

6. Strata Management Fees

• What it includes: Professional administration of the owners corporation, including meetings, compliance, financials, and advice.
• Variability: Subject to the service model. McCormacks provides a customised, premium service delivery, with a low buildings-to-manager ratio — which provides a high level of customer service and can save money in the long run.

7. Capital Works Fund Contributions

• What it includes: Funds reserved for major repairs and replacement of shared assets (e.g. roof works, lift replacement, façade maintenance).
• Variability: Newer buildings start lower but contributions increase as the building ages. Having a clear, realistic long-term maintenance plan is crucial.

8. Compliance and Safety

• What it includes: Fire safety inspections, lift certifications, WHS compliance, asbestos registers, and mandatory reporting.
• Variability: Higher in larger or older buildings, particularly where lifts, fire systems, or hazardous materials are involved.

9. Landscaping

• What it includes: Garden maintenance, lawn mowing, irrigation system upkeep, and plant replacement.
• Variability: Costs are significantly higher in buildings with rooftop gardens, vertical greenery, or landscaped communal courtyards. Simple ground-level plantings are more affordable.

10. Amenities: Pool, Gym, Lift, Carpark and Other Facilities

• What it includes: Operation and upkeep of recreational and convenience features, such as swimming pools, gyms, saunas, lifts, and multi-use rooms.
• Variability: Pools require regular servicing, chemicals, and compliance. Gyms need equipment maintenance. Lifts demand ongoing certification, energy usage, and emergency systems. The more amenities, the higher the running and compliance costs.

Why strata costs can vary

Strata fees can range from a few thousand dollars per lot annually in a small walk-up to tens of thousands in a luxury high-rise with resort-style amenities. Key cost drivers include:

• Building Size & Number of Lots: Larger buildings can spread costs but often have more complex infrastructure.
• Age of the Building: Older buildings require more repair and compliance work.
• Location: Inner-city, beachside, or bush-adjacent buildings often attract higher service and insurance costs.
• Amenities: Pools, gyms, lifts, saunas, cinemas, or concierge desks drive up costs — but can also boost property value when well-maintained.

Introducing McCormacks ‘Benchmark My Strata’ Service

As part of our commitment to premium service and transparency, McCormacks now offers ‘Benchmark My Strata’ – a tailored strata health-check.

This allows you to compare your building’s expenses with similar properties in our premium Sydney portfolio — taking into account your building’s unique profile and requirements. It highlights opportunities for savings, over- or under-spending, and improvements — so you can make informed, future-proofed decisions.

Want to Know How Your Building Compares?
We have over 30 years’ expertise in managing some of Sydney’s most prestige complexes of all sizes, and we apply this knowledge to your strata complex.

Take the McCormacks Benchmark Your Strata and get a free, confidential consultation with our experts.