When diving into the world of strata, it's crucial to grasp the dynamics of strata levies, as they play a significant role in your ongoing commitment. However, the intrigue lies in the fact that not all strata levies are created equal. Low fees might raise a red flag, signaling potential issues with building maintenance or overall upkeep. In this blog post, Compass Strata unravels the mysteries surrounding strata levies, shedding light on why they differ from one building to another.
Unveiling the Strata Levy Landscape
Strata levies encompass different components, each serving a specific purpose:
Administration Levy: These are the standard, recurring fees covering day-to-day expenses such as maintenance, cleaning, insurance, and common area utilities. They're an annual commitment for all owners.
Capital Works Levy: Set aside in a dedicated fund, these fees cater to major renovations, repairs, and significant maintenance beyond the scope of standard daily operations. The fund may also finance upgrades and approved infrastructure projects.
Special Levies: When capital works funds fall short for substantial improvements or urgent maintenance, special levies come into play. The implementation of these levies requires approval through a General Meeting vote.
Both the Admin and Capital Works levy are struck quarterly, whilst the frequency of any Special Levy (if struck) will depend on the urgency in which funds are required.
Deciphering Equality and Disparity in Levies
While some buildings might have uniform strata fees for all apartments, most situations involve varying sizes and, consequently, different strata levies. The size and specific features of each unit contribute to the fee calculation. For instance, additional amenities like balconies, extra parking spaces, or direct courtyard access enhance a unit's value, leading to higher strata fees. Ultimately levies are struck based on your Unit Entitlement.
Moreover, investors with multiple apartments are subject to individual strata fees for each property they own. This diversity in fees aligns with the principle of paying based on the specific value and attributes of each unit.
Cracking the Code: How Strata Fees Are Determined
Strata fees are not a one-size-fits-all scenario; they depend on a myriad of factors:
Property Value: Strata fees often range from 0.3% to 1.2% of the property value. Buildings with added amenities command higher percentages, reflecting the overall value of the structure.
Onsite Services: The level of onsite services, such as concierge, security, or cleaning, directly influences strata levies. More services mean higher fees to cover the additional costs.
Location Matters: Desirable locations translate to higher property values and, consequently, elevated strata fee percentages. Investing in prime locations often comes with a premium on strata fees.
Unlocking the secrets of strata levies can be challenging, especially for those new to strata living. Let Compass Strata be your knowledgeable guide through this complex terrain. If you seek expert assistance in strata management or have concerns about your scheme's financials, reach out to Compass Strata today. Allow us to handle the responsibilities of strata management, ensuring transparency and peace of mind for all lot owners.
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