As we prepare to vote on our upcoming strata levies, we wanted to share a few important financial considerations to help everyone make an informed decision.
Our latest financial figures show a strong cash position: as of 30 June 2026, our Net Owners’ Funds stood at $391,963.83 (up from $278,669.65 in April 2025). Despite this solid overall balance, there is a proposal to increase levies further as a precautionary measure.
While building a reserve is important, any increase directly impacts every owner—whether you live in your unit or rent it out. We believe any levy increase should be backed by a clear budget, an identified purpose, and realistic forecasts. Here are a few key points to consider before voting:

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1. Do We Need to Raise Funds in Advance?

The Administrative Fund currently shows a deficit of $34,313.33. Before raising overall levies, it makes sense to examine what caused this temporary deficit, whether those costs are recurring, and if sensible savings can be made without compromising essential maintenance.

We essentially face two options:
• Option A: Raise extra funds early "just in case" for potential expenses years down the line.
• Option B: Keep levies moderate now, and utilize a targeted special levy if and when a major capital expense actually arises.

History shows that when large sums sit unused in a strata account, future committees are often under less pressure to control costs.
A special levy structure, by contrast, ensures complete transparency and requires clear justification before money is spent.

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2. The Hidden Costs of Paying Strata Early

In today’s economic climate, asking owners to prepay for potential future projects isn’t always the most efficient use of your money:

• Immediate GST Leakage: 10% of every dollar collected in levies goes directly to GST and is paid to the government immediately. That money stops working or earning interest for our scheme straight away.
• Tax Differences: While our strata account earns interest (around 4% p.a.), those earnings are taxed at the strata rate of 25%.
• Your Money Works Better for You: Depending on your personal situation, holding onto your cash—either in a personal high-interest savings account, an offset account, or using it to reduce debt (where interest rates can reach 12% or more)—is far more cost-effective. Prepaying a expense 6 years early through strata can effectively cost you 16% to 50% more than managing those funds yourself.

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3. Property Value and Buyer Appeal
When prospective buyers evaluate our building, high ongoing levies are often a significant red flag that can depress property values. Keeping ongoing levies fair and reasonable makes our properties more attractive on the market, while special levies can be used responsibly for genuine, one-off improvements when required.

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Every owner’s financial situation is different, but keeping our money in our own hands until it is actually needed gives everyone greater flexibility and control. We encourage you to look closely at the budget, ask questions at the upcoming meeting, and consider whether a levy increase is truly necessary at this time.

Our strata funds showed a balance of $278,669.65 at 30 April 2026, rising to $391,963.83 in Net Owners’ Funds as at 30 June 2026.

Despite this, there is a proposal to increase levies further as a precautionary measure. Any increase affects both resident owners and investment owners and should be supported by a clear budget, an identified purpose and reasonable forecasts.

The administration fund had a reported deficit of $34,313.33. Owners may wish to examine which costs contributed to that deficit, whether those costs are recurring, and whether savings can be achieved without compromising essential maintenance.

The question that you may wish to ask is whether it is better to raise more funds earlier that may or may not be required over several years, or be faced with a special levy when and if a major expenditure is required.

When there are large amounts of money sitting in an strata account, there will be a greater likelihood of a future strata committee to more readily spend money than if they have to justify owners for a special levy.

In this current financial climate it will be difficult for many owners to find the extra funds for a maybe large expenditure, owners who may not be here should it be required.

Owners may also wish to consider the financial effect of collecting funds substantially in advance of expenditure.
The levies including those intended for future costs collected by our Strata include a General Sales Tax (GST) of 10% which is paid almost immediately to the government, so this almost 10% does not add to Strata funds or earn interest for the period.

While the funds being held for future costs currently earn about 4% p.a.in the hands of the Strata, this is taxed in the hands of the Strata at 25%. It can be estimated that paying in advance for a possible future strata cost in 6 years will cost will you about 16% more than putting the same amount away in your own savings, up to almost 50% more if you are paying for borrowed funds at 12% p.a.

The financial effect will differ between owners according to their savings, borrowing costs and tax circumstances.

Additionally a property that has high levies often discourages potential buyers when selling.
Reducing the levies is most likely to increase the value of your property, and are so relevant in making a buying decision that they are usually disclosed in the marketing material.
As a recent buyer, the above average levy rates by the Gardinia almost stopped the purchase.