Your strata committee is likely run by people in the building who can explain the squeak in the lift and not just complain about it. They’re dedicated, local and there when it counts.
The reality is that most owners are ghosts when it comes to running their building; at general meetings, they are missing in action from the discussions and decisions that govern their assets. Across Australia, between 60 and 70 per cent of apartment owners are investors. Even many resident owners choose to take a back seat.
This creates a disconnect in how levies and assets are managed.
A committee is legally bound to act in the “best interests” of all owners, but consider how different that can be for:
- A Retiree: On a fixed income and budget
- A First Home Buyer: Cash poor after raising a deposit
- A Family: Stretched thin by interest rates, groceries and daycare
- A Downsizer: New to strata and cash-rich; has high living standards
- A Investor: Prioritises predictable costs, attracting reliable tenants and tax benefits.
The problem? Your strata roll is a spreadsheet, not a biography. It doesn’t include each owner’s pain threshold for a large, lump-sum payment.
Every funding decision, from a $10,000 paint job to a multi-million-dollar structural fix hits every “hip pocket” differently.
Three Ways to Fund Capital Works
These decisions matter. Doing nothing always costs more. When a building faces major capital works, the Owners Corporation isn’t just deciding how to pay the bill. They are deciding how it will hit each owner’s wallet and the value of their asset.
The Three Paths of Funding
- Capital Works Fund:
The “save-as-you-go” approach. You think you’re being frugal, but inflation and rising costs are eating your savings.
- Construction costs rise faster than interest earned
- Interest earned is taxed at the corporate rate, so the value of savings shrinks as the building ages
Unplanned, non-negotiable upfront lump sum payment imposed on every owner.
- For owners without available funds, this is a high-stress experience
- For those with funds, this creates lost opportunities to do something better or earn higher returns with that money
Act now, with the cost spread over time in regular, predictable repayments.
- Lock in today’s costs and get started
- Predictable monthly repayments and no lump-sum shock
- Low fees and flexible terms. Interest-only periods available and zero interest on undrawn funds
- The Owners Corporation is the borrower, not you. No personal guarantees or impact on personal credit
Owners who opt out of strata decision-making put their future costs and assets in the hands of whoever shows up to the general meeting.
How Do These Funding Options Compare?
| Capital Works Fund | Special Levy | Strata Loan | |
|---|---|---|---|
| A Retiree (Fixed income) | Feels safe and familiar. Costs often outpace fund’s growth, causing financial strain. | On a fixed income, a large lump sum levy is a significant blow to super, savings and investments. | Predictable levies that are easy to budget and manage. Super and savings stay intact. No lump sum payment. |
| A First Home Buyer (Cash-poor) | No financial buffer. Strata costs feel manageable until a major repair exceeds the savings. | Financially tapped out after raising a deposit. Any lump sum amount compounds stress of mortgages and living costs. An unexpected special levy could also reduce first home buyers’ equity enough to reinstate a Lenders Mortgage Insurance obligation. | Protects cash flow and borrowing power. Loan stays with the lot after the sale. |
| A Family (Cash-flow stretched) | Feels secure until the fund can’t cover a major repair. | Large one-off hit to a stretched family budget. That means hard sacrifices on life’s “extras” or even essentials. | Manageable, predictable repayments keep funds available for family life and what matters most. |
| A Downsizer (Asset-rich, cash-ready) | Comfortable with regular levies and has high living standards. | Can pay a lump sum, but values control over when and how they spend. | Cost of investment is matched to the life of the asset. No impact on your personal credit score. Work starts promptly. |
| A Investor (Tax and yield focused) | No tax benefit on contributions. Interest taxed at 30%, so the balance lags construction inflation. | Diverts capital and reduces returns on other assets. Zero tax advantage. | Principal and interest repayments through admin fund are 100% income tax deductible. Predictable future levies, costs matched to life of asset. |
Your strata committee works hard, but they aren’t mind readers.
Whether you’re a retiree on a fixed income or a first-home buyer on a tight budget, only you will know what is in your best interests when deciding how to fund major works.
Don’t leave the future of your largest asset to the people who happen to show up. Don’t be a ghost. Get involved, evaluate each option and make your vote count.
The building will always need work. The bill will always arrive. The only question is who has a say in how it gets paid.
Deciding what is in everyone’s “best insterests” will always depend on the voices in the room or on the screen.
Don’t be a ghost. Make your voice heard and your vote count.
This post appears in the May 2026 edition of The NSW Strata Magazine.
Keith Hallet Lannock E: keith@lannock.com.au P: 0432 043 679
Michelle Malpass Lannock E: michelle@lannock.com.au P: 0432 091 786
Charlotte Steen Lannock E: charlotte@lannock.com.au P: 0460 329 701