Few strata surprises sting like a special levy letter in the letterbox. The quarterly budget was fine — then the lifts failed, the facade needed remediation, or the insurance renewal doubled, and suddenly every owner owes thousands. This guide explains what special levies are, when they can be raised, how they are calculated and shared, what rights you have if you cannot pay, and how committees can plan so special levies become rare.
Special levies exist because the regular budget failed to plan. Understanding how sinking funds and capital works funds work is the best defence against unexpected levies.
What is a special levy?
A special levy (also called a additional contribution) is a one-off charge raised by the owners corporation to cover expenses that were not budgeted in the regular fund contributions. Under the Strata Schemes Management Act 2015 (NSW) and equivalent legislation in other states, the owners corporation must levy sufficient funds to meet actual and expected expenditure — so when unexpected costs arrive, extra contributions are the mechanism that pays for them.
Common triggers for special levies include:
- Major capital works: lift replacement, facade remediation, waterproofing, repainting
- Building defect rectification, especially where the builder is insolvent
- Insurance shortfalls, excesses on large claims, or premium spikes
- Fire safety compliance upgrades (cladding, alarms, sprinklers)
- Legal costs for major litigation (defects claims, by-law disputes)
- Damage not fully covered by insurance
How a special levy is raised
A special levy is not the committee’s decision alone. It must be approved by the owners in a general meeting:
- The proposed expenditure and levy amount appear on the meeting agenda with supporting quotes or cost estimates
- Owners vote — most expenditure motions require an ordinary resolution; some major works require a special resolution (75% support)
- If passed, the levy is struck, usually with instalment options (for example, four quarterly instalments)
- Levy notices are issued with due dates; interest accrues on arrears at the legislated rate (10% simple in NSW)
The levy is typically shared in the same proportions as ordinary levies — by unit entitlements — so owners of larger lots pay more. Some schemes strike special levies against a different distribution where the benefit relates to specific lots, but that requires careful legal advice.
Typical special levy amounts
Amounts vary enormously with building size and the works required, but common ranges in Australian schemes:
| Works | Typical per-lot levy | Notes |
|---|---|---|
| Repainting + minor repairs | $2,000 – $6,000 | 10-year cycle in most schemes |
| Lift replacement (medium building) | $8,000 – $20,000 | Often staged over 2-3 years |
| Facade / waterproofing remediation | $15,000 – $60,000+ | Defects-related, can be much higher |
| Cladding rectification | $20,000 – $100,000+ | Government subsidies sometimes available |
What if you cannot pay a special levy?
If you are an owner-occupier facing a large levy, options include:
- Instalments: vote for (or request) an instalment plan at the general meeting — many schemes allow 4-8 quarterly instalments
- Strata loan products: specialist lenders offer strata levy finance repaid monthly, avoiding interest penalties to the owners corporation
- Hardship applications: some owners corporations will vary payment terms for genuine hardship, though they are not obliged to
- NCAT orders: in limited cases, payment orders can be varied
Ignoring a special levy is costly: the owners corporation can charge interest, place a charge on the lot, and ultimately recover the debt through court proceedings, with legal costs added.
Can a special levy be challenged?
Yes, but grounds are narrow. An owner can challenge a levy at a tribunal (NCAT in NSW, VCAT in Victoria) if the process was defective (inadequate notice, wrong resolution type), the expenditure was outside the owners corporation’s power, or the levy distribution is inconsistent with the Act. Simply disagreeing with the works is not grounds — that is what the vote at the meeting is for. Owners who lost the vote are still bound by the levy.
How committees avoid special levies
The best committees plan 10 years ahead. A current, professional capital works (sinking) fund plan, reviewed every 5 years and updated annually, spreads predictable costs into quarterly contributions so owners are not ambushed. See our guides to sinking funds in strata and whether strata fees are worth it for how budget quality differs between well-run and poorly-run schemes.
Frequently asked questions
Is a special levy tax deductible?
For investment properties, special levies for repairs and maintenance to the part of the building relating to your lot are generally deductible in the year paid; amounts for capital improvements are depreciated instead. Get advice specific to your situation — see our guide to strata fee tax deductions.
Do I pay a special levy if I just sold my unit?
Levies follow the calendar: if the levy was struck before settlement, liability usually rests with the seller unless the contract apportions it. Check your contract of sale and adjustment figures.
Can a special levy be struck without a general meeting?
No — except where legislation permits limited committee-delegated spending (usually capped at 5% or 10% of the budget), a special levy must be approved by owners in a general meeting.
Related guides: sinking funds explained, consequences of unpaid strata fees, strata budgeting tips.