How to Set and Raise Strata Levies Without Upsetting Owners

Raising levies is the decision owners most dread hearing about and treasurers most dread proposing. But most of the friction doesn't come from the increase itself — it comes from an increase that looks arbitrary, lands without warning, or seems to fall unfairly on some lots. Get the three underlying jobs right — a budget you can defend line by line, a split that follows each lot's entitlement, and communication that arrives before the invoice — and a levy rise stops being a fight and becomes a decision owners understand, even if they don't love it. This guide walks through all three.

Setting levies is really three separate jobs

1. Build a defensible budget — what the scheme actually needs to raise this year, for both the day-to-day fund and the long-term fund.
2. Split it fairly — divide the total across the lots according to each lot's unit entitlement, not evenly by default.
3. Communicate it — put the numbers in front of owners early, with the reasoning, before they see the invoice.

Owners forgive a well-explained increase. They don't forgive a surprise.

Why getting this right matters

• A defensible budget ends the argument before it starts. "Why is it going up?" is easy to answer when every line traces to a real cost.
• An unfair split is what actually makes people angry — more than the total. Owners compare notes, and a lot that's paying more than its entitlement says it should will notice.
• Under-setting levies is its own trap. Keeping levies artificially low to avoid conflict just defers a bigger special levy later — the worst kind of surprise.

Job one: build a defensible budget

Start from what the scheme actually has to fund this year, across both funds:

• The administrative (day-to-day) fund — insurance, cleaning, gardening, common-area utilities, minor repairs, audit and admin costs. Base each line on last year's actuals plus known changes (an insurance premium rise, a new contract).
• The capital works (long-term) fund — the annual contribution your capital works forecast says you need to have the money ready when major works fall due.

Add them, subtract any expected non-levy income and surplus carried forward, and you have the total to raise. The discipline here is simple: every number should trace to a real cost, a quote, or the forecast. A budget built that way survives questions at the AGM; a budget built by "last year plus 5%" doesn't.

Job two: split it fairly by unit entitlement

This is the part self-managed schemes most often get wrong. Levies generally aren't split evenly across lots — they're split according to each lot's unit entitlement (also called lot entitlement or liability), the figure recorded for your scheme that reflects each lot's proportional share. A larger or more valuable lot usually carries a larger entitlement and therefore a larger levy.

• Use the entitlements on record, not a flat per-lot figure, unless your scheme's rules genuinely provide for equal shares.
• Each lot's levy = total to raise × (that lot's entitlement ÷ total entitlements).
• Keep the two funds separate in the calculation, so owners can see the admin-fund share and the capital-works share of their levy distinctly.

Getting the split right is what lets you look any owner in the eye and show that their contribution is exactly their entitlement's share — no more, no less.

The mechanics of how levies are struck and approved differ by state:

South Australia, Tasmania, the ACT and the Northern Territory all levy contributions on a proportional-entitlement basis set at a general meeting, with local variations in terminology and instalment rules — confirm the specifics for your scheme.

Job three: communicate the increase before the invoice

A levy rise that arrives as a line on an invoice feels like something done to owners. The same rise, explained in advance, feels like a decision they were part of. Before the AGM that sets the levy:

• Send the draft budget with the notice of meeting, not just the bottom-line figure — show the lines that moved and why (the insurance premium, the capital works contribution the forecast calls for).
• Explain the increase in plain terms: what's driving it, what it funds, and what happens if it isn't raised (deferred works, a bigger special levy later).
• Show the per-lot impact, ideally per quarter, so owners see the real number they'll pay rather than the alarming annual total.
• Give them the forum to ask — the AGM is where the levy is approved, so the reasoning needs to be in front of them before they vote.

Common mistakes

1. Splitting levies evenly instead of by entitlement

The most common fairness error. Unless your scheme genuinely provides for equal shares, levies follow unit entitlements — and owners paying more than their share will find out.

2. Keeping levies too low to avoid conflict

Under-funding this year to keep the peace just builds a bigger special levy for later. A steady, explained increase beats a sudden shock.

3. Announcing the number without the reasoning

A figure with no explanation invites suspicion. The budget lines are the argument — show them.

4. Forgetting the capital works contribution

Levies that only cover this year's operating costs leave the long-term fund starving. Set the capital works levy from the forecast, not from what's left over.

Frequently asked questions

Do we have to raise levies at a general meeting?

Yes — the budget and contributions are approved by the owners at a general meeting (usually the AGM), not set by the committee alone.

Can we charge all lots the same levy?

Generally no — levies are split by unit entitlement unless the scheme's rules validly provide for a different basis. Check what's recorded for your scheme.

How much notice do owners need of an increase?

The increase is approved at a general meeting, so the draft budget should go out with the notice of meeting, within your state's required notice period, giving owners time to review it before they vote.

What if owners vote down the increase?

Then the scheme is funded to whatever level they approve — which may mean deferring works or facing a special levy later. Presenting the consequences clearly, in advance, is what usually carries a necessary increase.

This guide is general information for self-managed strata schemes in Australia. It is not legal advice. The basis for striking and splitting levies differs between states — always check the strata legislation and the entitlements recorded for your scheme.