Essentially, the choice boils down to a special levy or a strata loan – or a combination of both.
Committees have a legal responsibility to make decisions to repair and maintain common areas in the interests of the body corporate. But considering the needs of individual owners is also critical.
There are countless variables to consider. One of the most important is the Queensland regulatory regime. It demands a much higher level of owner support for adding a strata loan to the funding mix than it does for raising the whole amount directly from owners via a special levy.
For a standard module, this means no-one voting against it. For others in accommodation or commercial modules, a loan needs a special resolution with no more than 25 per cent of votes against.
By contrast, a special levy can be approved in all modules with just an ordinary majority – just 50 per cent plus one vote. This regime dates back almost 30 years and is overdue for reform. Funding options should be evaluated on their merits, not the best chance of winning a vote.
Today, compared to a special levy, a strata loan offers more certainty in financing major projects. It gives more stability in levies over time, better tax benefits for investors and less financial strain for all owners. A way to compare these funding options is to use LevyPlanner, a tool that shows the true cost and cash-flow impact of any funding mix.
We’re not here to say borrowing is always the best path, a special levy may be perfectly appropriate in some situations, and in others a combination of both could be the right fit. When the time comes to vote, every owner needs to be fully informed and comfortable that the recommended funding solution is right for them. Asking the right questions and presenting the right information in the right way at the right time can make all the difference.
| Special Levy | Strata Loan | |
|---|---|---|
| Standard Module | 50%+1 of votes at AGM or EGM | <$250 x number of lots can be approved by an ordinary resolution at a general meeting |
| >$250 x number of lots requires a resolution without dissent | ||
| Accommodation Module | Ordinary resolution at a general meeting | >$250 x number of lots requires a special resolution |
| Commercial Module | Ordinary resolution at a general meeting | <$250 x number of lots can be approved by an ordinary resolution at a general meeting |
| >$250 x number of lots requires a resolution without dissent |
Figure 1 footnote: A body corporate can borrow via ordinary resolution, without needing a special resolution, up to a limit of $250 plus $250 per lot. For example, $2,750 for a 10-lot scheme or $25,250 for a 100-lot scheme.
How much do we need?
A good starting point is estimating how much each owner might need to contribute, after tapping into existing administrative or sinking funds. A ballpark figure is fine, this helps size the problem. The real question to consider is whether the body corporate could raise this amount through a special levy without placing undue strain on the scheme as a whole. If the answer is ‘yes’, then a special levy is likely the best solution.
If not, then it’s time to start building the case for a strata loan.
How soon do works need to start?
This is where a special levy can stop being the easy solution. Levies must be paid before contracts can be signed and the work can start. If enough owners simply can’t pay in time, quotes may expire and the whole project returns to square one.
Once approved, a strata loan can be drawn immediately so works can start. Interest is only paid on the funds drawn down, so a loan can allow room for contingencies should costs run over budget. This avoids the problem of going back to owners for more cash later.
So, if certainty is important and works are time-critical, a strata loan will be the best solution.
How do we get everyone on board?
Funding resolutions live or die through information and momentum.
The resolution needs to be supported by concise, easy-to-digest information to help owners make the right decision. At Lannock, we are experts in this field and can help explain clearly why the proposed choice makes financial sense for the scheme and for the owners.
An important point to stress with a strata loan is that the debt sits with the Body Corporate, not the individual owners, and like any other contracted expense the cost is paid from levies and when an owner sells that cost is passed on to the new owner. A strata loan will have no impact on personal finances, as the borrower is the body corporate not the individual.
Timing also matters. The best time to consider finance is at the beginning of a project. Deciding how the project will be paid for before locking in the scope of works helps owners understand what they can actually afford, in the same way a homeowner works out their budget before engaging a contractor.
Presenting a united front with information that makes sense helps build positive momentum. Better still, invite Rich or Jason from Lannock to the meeting to answer any questions.
This post appears in the August 2026 edition of The QLD Strata Magazine.
Jason Triplett Lannock E: jason@lannock.com.au P: 04 6777 7272
Richard Claus Lannock E: rich@lannock.com.au P: 04 1703 0871