Strata Levy Notice

Purpose of the Levy

Strata schemes collect levies to cover the costs of running the building. When you look at your notice, you will see the money is split into different buckets. In New South Wales, these are called the Administrative Fund and the Capital Works Fund. Other states might call them Sinking Funds. You might also see a charge for a Special Levy. It is important to know the difference, as this determines how the owners corporation spends your money.

Administrative Fund

The Administrative Fund covers the day-to-day running of the property. Think of this like the weekly grocery budget. It pays for regular expenses that keep the lights on and the building clean. This includes insurance, electricity for common areas, gardening, and routine maintenance contracts. The Strata Schemes Management Act 2015 (NSW) requires owners to raise enough money in this fund to pay for these recurring costs. If you are a tradesperson providing cleaning or gardening services, the invoice usually comes from here.

Capital Works Fund (Sinking Fund)

The Capital Works Fund is a savings account for future big ticket items. You might hear this called a Sinking Fund in older documents or in other states. This money pays for capital expenses that do not happen every year. This includes replacing the roof, repainting the building, or resurfacing the driveway. Under the Strata Schemes Management Regulation 2016 (NSW), the owners committee must prepare a 10-year capital works plan. This plan estimates the cost of major repairs and sets levy levels to save up for them. If you are a contractor replacing a lift motor or waterproofing a bathroom, your payment comes from this fund.

Special Levies

Sometimes the planned savings are not enough. If the building needs urgent repairs or faces a sudden large bill, the owners corporation can raise a Special Levy. This is a one-off charge on top of the regular quarterly levy. It is often used for unexpected problems like major storm damage or a sudden increase in insurance premiums. State laws, such as the Body Corporate and Community Management Act 1997 (QLD), set strict rules on how owners vote to approve these extra charges. For a business owner, a Special Levy means the scheme has secured the cash to pay for a specific large project immediately.

Payment Methods and Reference Details

Payment is required by the due date listed on this notice to avoid any late payment fees or interest charges. You can pay your strata levy using either electronic bank transfer or by posting a cheque. Regardless of the method you choose, you must use the correct reference number.

Electronic Funds Transfer (EFT) or BPAY

Electronic transfer is the fastest and most reliable way to pay. The details for the strata plan trust account are listed below.

Bank: [Insert Bank Name] Account Name: [Insert Strata Plan Name] Trust Account BSB: [Insert BSB Number] Account Number: [Insert Account Number]

When you process this payment online, you must enter your Lot Number in the payment description or reference field. For example, if you own Lot 5, type '5'. If you are a tradesperson or business owner paying an invoice, please include the lot number followed by your business name so the strata manager can allocate the funds correctly.

Do not use the words 'levy' or 'fees' as the reference. The bank software needs the specific lot number to match the payment to your owner ledger.

Failure to use the correct lot number will result in an unallocated cash balance in the trust account. Under the Strata Schemes Management Act 2015 (NSW) or relevant state legislation such as the Body Corporate and Community Management Act 1997 (QLD), the owners corporation must keep accurate financial records. If the reference is missing, the strata manager cannot legally credit your account, which may lead to the system marking your levy as overdue.

Payment by Cheque

If you prefer to pay by cheque, make it payable to the Strata Plan or the Strata Managing Agent. Do not make the cheque payable to an individual. Write your Lot Number clearly on the back of the cheque.

Post the cheque to the strata manager’s office at the address listed on this notice. Please allow five business days for mail processing. A cheque is only considered paid once the funds clear in the trust account. If the cheque bounces, your financial institution may charge fees, and the owners corporation may apply a dishonour fee in accordance with the strata scheme's by-laws.

Importance of the Reference Number

Using your specific Lot Number as the reference is critical. It is the only way to identify you within the strata roll. Without it, the payment sits in a suspense account. This causes administrative issues and potential legal disputes regarding debt recovery. Ensure the reference number is correct on every transaction to keep your account in good standing.

Legal Obligations for Payment

You must pay the levies listed on this notice by the due date shown. Under the Strata Schemes Management Act 2015 (NSW) (or relevant state legislation such as the Body Corporate and Community Management Act 1997 (QLD) or Owners Corporations Act 2006 (Vic)), the payment of levies is not optional. It is a statutory debt owed by the lot owner to the Owners Corporation. These funds are essential for the maintenance of common property, insurance coverage, and the administration of the building scheme.

If you do not pay by the due date, the Owners Corporation has the legal right to charge simple interest on the outstanding amount. The rate of interest is usually set by the specific state regulation or the scheme's by-laws. For example, under the Strata Schemes Management Regulation 2016 (NSW), interest accrues daily from the date the payment was due until the date it is actually paid. This interest becomes a debt recoverable in the same manner as the original levy amount.

Persistent failure to pay levies triggers the formal debt recovery process allowed by state law. The Owners Corporation may issue a formal notice of demand. If the debt remains unpaid, the matter can be referred to the NSW Civil and Administrative Tribunal (NCAT), Victorian Civil and Administrative Tribunal (VCAT), or the relevant state tribunal or court. An order from these bodies for the payment of debt is legally binding.

If a court or tribunal order is made and you still do not pay, enforcement action may follow. This can result in the garnishment of wages, charging the debt against your property title, or bankruptcy proceedings in severe cases. The legislation typically allows the Owners Corporation to recover all reasonable legal costs and expenses incurred in recovering the debt from the lot owner.

As a tradesperson or small business owner, maintaining a clear cash flow is vital. However, strata levies operate as a strict legal liability separate from your commercial accounts. Ignoring this notice will lead to increased costs through interest and legal fees. To avoid additional financial burden and potential legal action, ensure payment reaches the body corporate manager or the nominated trust account immediately upon the due date.

Contacting the Strata Manager

If you have any questions regarding the payment amount, due date, or the services covered by this levy, contact the Strata Manager immediately. You must raise any issues before the due date to avoid penalty interest or late fees. Do not wait until you receive a reminder notice.

• Name of Strata Manager: [Insert Manager Name]
• Email: [Insert Email Address]
• Phone: [Insert Phone Number]
• Office Hours: [Insert Hours]

Disputing the Levy Amount

You have the right to dispute a levy if you believe it is incorrect or if the Owners Corporation did not follow the correct procedure to set the amount. Under the Strata Schemes Management Act 2015 (NSW) (or relevant state legislation such as the Body Corporate and Community Management Act 1997 (QLD) or the Owners Corporations Act 2006 (Vic)), levies must be set based on a properly approved budget at an Annual General Meeting (AGM).

To challenge a levy, follow these steps.

1. Review the AGM Minutes Check the minutes from the last Annual General Meeting. Verify that the budget and the resulting levy amounts were formally approved by a vote of the owners. If the committee raised the levy without a vote at a general meeting, the increase may be invalid.

2. Submit a Written Request Put your dispute in writing and send it to the Strata Manager. State clearly why you believe the calculation is wrong. Request a copy of the approved budget and the breakdown of the contribution schedule for your lot. This information is your entitlement under Australian strata law.

3. Internal Dispute Resolution If the Strata Manager cannot resolve the issue, you may request a meeting of the Owners Corporation to discuss the matter. Many states require parties to undergo internal dispute resolution before taking legal action.

4. External Dispute Resolution If the dispute remains unresolved, you can apply to your state’s Civil and Administrative Tribunal (NCAT in New South Wales, VCAT in Victoria, QCAT in Queensland). You must generally do this within a specific time frame. While a dispute is active, you should continue to pay the undisputed portion of the levy to avoid accumulating debt.

Important Note on Payment Raising a dispute does not legally stop the requirement to pay the levy. You must continue to pay the amount demanded unless a court or tribunal orders otherwise. If you withhold payment, you may incur debt collection fees or interest, regardless of the merit of your dispute.

GST and Tax Information

This section sets out the tax implications for the levies listed in this notice. You must read this information carefully to ensure you meet your obligations under Australian tax law.

Goods and Services Tax (GST) Status

The levies charged in this notice are usually input taxed. This means the Owners Corporation does not charge Goods and Services Tax (GST) on these specific amounts. , you cannot claim a GST credit on these levies when completing your Business Activity Statement (BAS) or Income Tax Return.

You should check the specific line item descriptions in this notice. If an item relates to a residential rental premise, it is input taxed under Division 40 of the A New Tax System (Goods and Services Tax) Act 1999 (Cth). However, if the strata plan is predominantly commercial, the supply of strata services may be a taxable supply. In this specific commercial context, the amount will include GST. You must verify the tax status of your specific property with your registered tax agent or the Australian Taxation Office (ATO).

If GST is applicable, the total tax component will be clearly displayed. You are entitled to claim an input tax credit for the GST portion if the levy is exclusively for a creditable acquisition used in your business. You must hold a valid tax invoice to claim this credit. This document serves as that tax invoice for amounts of $82.50 or more, including GST, provided it shows the Australian Business Number (ABN) of the Owners Corporation and the amount of GST payable.

Income Tax Deductions

For owners running a small business or renting out the property, strata levies are generally a deductible expense. You can claim a deduction for the levies in the income year you pay them, provided they are necessarily incurred in earning your assessable income. You should refer to Taxation Ruling TR 97/23 regarding deductions for rental expenses.

Record Keeping Requirements

You must retain this notice for your records. Under the Taxation Administration Act 1953 (Cth), you are required to keep records for five years after they are prepared, obtained, or the transactions completed, whichever is later. This period extends to seven years in some situations involving complex arrangements or disputes.

Proper record keeping is essential if the ATO reviews your tax affairs. You should store this notice with your other financial documents, such as your rental property schedules or purchase logs. Electronic copies are acceptable if they are a true and clear reproduction of the original and can be accessed at any time by the ATO.

If you are unsure about how to claim these amounts, seek professional advice from a qualified tax accountant. The ATO website also provides detailed guidelines on claiming rental property expenses and managing your business records.