THE APARTMENT GUY | INSIGHT Nº004
The Apartment Guy is a series of practical insights to help apartment buyers understand what to look for, what questions to ask and how to make more informed property decisions.
$50,000 special levy. Red flag? Not necessarily.
Imagine finding an apartment you love.
The location is right.
The building presents well.
The apartment fits your brief.
Then you discover there’s a substantial special levy attached to the building.
$20,000.
$30,000.
Maybe $50,000 or more.
For many buyers, that’s enough to stop the conversation.
And I understand why.
But a large special levy doesn’t automatically tell me that a building is a bad place to buy.
It tells me I need to understand why the money is being raised.
Because sometimes a special levy is evidence of a building with serious problems.
And sometimes it’s evidence of an owners corporation that’s actually dealing with them.
Those are two very different things.
What is a special levy in NSW strata?
When you own an apartment in a strata scheme, your regular strata levies contribute towards the costs of running, maintaining and repairing the common property.
Strata levies are paid into funds managed by the owners corporation. The administrative fund covers day-to-day expenses, while the capital works fund is used for major building works such as replacing roofing, lifts or fencing.
But sometimes there simply isn’t enough money available.
The NSW Government specifically advises buyers that special levies may be needed when a strata scheme doesn’t have enough money to pay for large capital works or unforeseen expenses.
That’s where things become interesting for me as a buyer’s agent.
Because the existence of the special levy is only the beginning of the story.
$50,000 tells me how much. It doesn’t tell me why.
Two apartment buildings could each have raised a substantial special levy.
On paper, they might look equally concerning.
But dig deeper and the circumstances could be completely different.
One building may have identified a significant issue, commissioned the appropriate professional advice, agreed on a rectification program and raised the money required to get the work done properly.
Another may have years of deferred maintenance, recurring problems, inadequate reserves and an owners corporation that has repeatedly reacted to problems rather than planned for them.
That’s why the number alone doesn’t tell me enough.
That’s why I wouldn’t recommend ruling out an apartment simply because the words special levy appear in the strata records.
I’d want to know what sits behind them.
Are low strata levies always a good sign?
This is something I think apartment buyers need to understand.
Low strata fees can look very attractive when you’re comparing properties.
Less money out of your pocket every quarter. What’s not to like?
Except low levies can sometimes mean a building hasn’t been putting enough money aside for future work.
The NSW Government specifically cautions prospective strata buyers that low levies could mean a steep rise in future fees.
That’s an important distinction.
I don’t necessarily want to see the cheapest strata levies.
I want to see a building that appears appropriately funded for the property it has to maintain.
What changed for NSW strata schemes in 2026?
This is particularly timely because NSW strata laws changed again on 1 April 2026.
Strata schemes are required to have a 10-year capital works fund plan to help identify and budget for the repair, maintenance or replacement of major common-property items.
From 1 April 2026, NSW strata schemes must use a standard form when preparing a new 10-year capital works fund plan or revising an existing plan.
For a buyer, that planning can provide useful information.
But understanding the figures is only part of the job.
What I’m looking for is the bigger financial story.
Does the way this building has been maintained, funded and managed give me confidence in what my client may be buying into?
That assessment isn't based on any one figure or document. It's about understanding how the pieces fit together.
Because I’m not just interested in the levy owners have already been asked to pay.
I’m interested in whether the building appears financially prepared for what comes next.
The special levy may not be the thing I’m most interested in
This is where experience matters.
A large special levy naturally attracts attention because there’s a dollar figure attached to it.
But when I’m assessing an apartment for a client, I’m looking beyond that number.
I want to understand the decisions, history and circumstances behind it.
A special levy rarely exists in isolation. Its significance becomes clearer when you understand how the issue arose, how it has been managed and what remains unresolved.
That's where experience and professional judgement matter.
Because a $50,000 levy funding a clearly defined and professionally managed project may tell me something very different from a building with no special levy but significant unfunded work sitting on the horizon.
Why context matters more than the headline figure
A special levy is information.
It’s not a verdict.
The same applies to high strata fees, low strata fees, defects and capital works balances.
None of those numbers should necessarily be considered in isolation.
They form part of a much bigger picture of how a building has been maintained, managed and financially prepared for its future.
And there’s a current statistic worth paying attention to.
Building Commission NSW’s 2025 Strata Defects Research Report, published in November 2025, found that 53% of surveyed NSW strata apartment buildings had serious defects.
The same research found waterproofing defects were the most prevalent serious defect at 22%, followed by fire safety systems at 16%. Encouragingly, newer buildings registered from 2022–2024 showed lower rates of serious defects than buildings registered from 2018–2021.
For me, that reinforces why understanding the bigger financial and maintenance picture matters.
Before I recommend an apartment, I want to understand the financial story
For me, due diligence isn’t simply about finding problems.
It’s about understanding them.
A special levy might make me recommend walking away.
It might not concern me once I understand the circumstances.
Or it might lead me to investigate something else entirely.
That’s the judgement involved.
The size of a special levy tells you how much.
It doesn’t tell you why.
And before my client buys into a building, I want to understand both.
Buy with confidence.
If you’re thinking about buying an apartment in Newcastle, Lake Macquarie or the Hunter, send me a message or book a complimentary call before you sign the contract.
A note on this article: This information is accurate to the best of my knowledge at the time of publication. Strata legislation and guidance can change, so always check the most current information and seek professional advice relevant to your circumstances.
Sources
NSW Government — Buying a strata property
Current guidance for prospective strata buyers covering strata levies, capital works funds, special levies, financial health and strata reports. The guidance specifically cautions that low levies can mean steep increases in future fees and that special levies may be needed where there isn’t enough money for large capital works or unforeseen expenses.
Buying a strata property — NSW Government
NSW Government — Guide to strata law changes for strata committees and owners
Current guidance on the 2026 strata reforms, including the standard form for 10-year capital works fund plans and their role in identifying and budgeting for major common-property expenditure.
Guide to 2026 strata law changes — NSW Government
NSW Fair Trading — Changes to strata laws
Confirms the NSW strata law reforms that commenced on 1 April 2026, including changes relating to standardised 10-year capital works fund plans.
Changes to strata laws — NSW Fair Trading
Building Commission NSW — 2025 Strata Defects Research Report, November 2025
The research found that 53% of surveyed NSW strata apartment buildings had serious defects. Waterproofing was the most prevalent serious defect at 22%, followed by fire safety systems at 16%. The research also found lower rates of serious defects among newer buildings registered from 2022–2024 compared with those registered from 2018–2021.
2025 Strata Defects Research Report — Building Commission NSW