Buying a strata title property
By Ali Hasani, Founder and Principal Mortgage Broker at Buyvest, MFAA accredited. Last updated July 2026. Strata rules described here are NSW specific. Lender policies vary.
This guide covers what strata ownership involves, what levies cost, what the strata records reveal, and the two lending questions that catch apartment buyers out: whether a lender will accept the building at all, and what the levies do to borrowing power.
The short version: Levies run $2,000 to $6,000 a year for townhouses and low-rise schemes and $4,000 to $12,000+ for apartments, and they reduce how much a lender will advance. Most lenders apply a minimum floor area around 40 to 50 square metres. Known defects or cladding narrow the panel further. A special levy approved before exchange but billed after settlement lands on the new owner.
What is strata title?
Strata title splits a building into individual lots and common property. An owner holds their lot exclusively and shares everything outside it, from the roof and lifts to the garden, through an owners corporation funded by quarterly levies.
The lot is what the owner controls: internal space, fixtures, floor coverings, built-in appliances and approved alterations. Everything structural sits outside it. External walls, foundations, roof, lifts, plumbing and electrical infrastructure, hallways, foyers and shared facilities are all common property, held collectively and maintained by the owners corporation.
Costs and votes are apportioned by unit entitlement rather than split evenly, so a larger lot carries a larger share of both. Car spaces and storage may be part of the lot or allocated from common property depending on the strata plan, which is worth confirming rather than assuming.
What are the advantages of a strata property?
Strata buys location on a smaller budget. An apartment or townhouse costs less than a house in the same suburb, hands most maintenance to the owners corporation, and often sits closer to transport and work than a detached house at the same price.
Price is the practical one. In the same suburb an apartment is the cheapest entry point and a townhouse sits between apartment and house, which brings the deposit within reach sooner and often puts a buyer inside Australian Government 5% Deposit Scheme price caps where a house would not be. A lower price also means less duty. Duty outcomes turn on personal circumstances, so a conversation with your accountant or financial adviser is worthwhile.
The rest follows from shared ownership. The owners corporation handles the exterior, so travel is easier and weekends are not spent on gutters. Buildings often carry security, and amenities like a pool or gym that no single owner could justify become viable across a scheme. The full head to head against houses is in our property type comparison.
What do strata levies cost?
Sydney strata levies commonly run $2,000 to $6,000 a year for townhouses and low-rise schemes, and $4,000 to $12,000 or more for apartments. Levies split between an administrative fund for running costs and a capital works fund for major repairs.
Two funds do the work. The administrative fund pays the running costs: cleaning, gardening, management fees, insurance premiums and minor repairs. The capital works fund, previously called the sinking fund, accumulates for the large items that arrive rarely and cost a great deal, such as roofing, repainting, lift refurbishment and waterproofing.
The range is wide because the building drives it. A small scheme with no lift and no facilities has little to maintain. A tower with a pool, gym, lift and concierge carries far more, and every owner funds it quarterly. A special levy is what happens when the capital works fund cannot cover a project and the difference is raised from owners directly.
What do the strata records show?
Strata records show levy history, fund balances, meeting minutes, by-laws, insurance and any disputes. The costliest thing they reveal is a special levy already approved at a meeting but not yet billed, which passes to whoever owns the lot when the invoice arrives.
The records cover levy history and current amounts, the balance of both funds, meeting minutes, by-laws, insurance, arrears and any disputes or tribunal proceedings. Minutes are where the future costs appear first, usually before they appear anywhere else.
That is the trap worth understanding. A special levy passed at a general meeting binds the lot, not the person who owned it at the time. A levy approved weeks before exchange and invoiced months after settlement lands on the new owner, and the only place it was visible beforehand was in the minutes.
NSW reforms through 2025 and 2026 have made more of this visible. From 1 April 2026 all schemes prepare 10-year capital works plans on a mandatory standard form, which makes funding shortfalls easier to spot across buildings. Developers of multi-storey buildings must now have an independent surveyor certify the initial maintenance schedule and levy estimates, addressing the long-standing problem of first-year levies set unrealistically low. Section 184 disclosure certificates now also reveal exclusive supply arrangements such as embedded energy networks, and any Fair Trading orders against the scheme. Owners also have six years, up from two, to claim damages where the owners corporation has failed to maintain common property.
Buying an apartment?
We check floor area and building policy across 35+ lenders, and factor the levies into your borrowing power. $0 cost to you.
Will a lender finance any apartment?
No. Lenders apply minimum floor areas to strata security, commonly 40 to 50 square metres, and small studios fall below the threshold at most of the panel. Known building defects or combustible cladding narrow the field further.
Not every apartment is acceptable security, and floor area is the first filter. Published lender minimums cluster around 40 to 50 square metres of internal living area, measured excluding balconies and car space. Some lenders draw the line at 35 square metres for a studio or one bedroom while requiring 60 for two or more. A compact studio can therefore be financeable at a handful of lenders and declined by most, which shows up as thin buyer demand at resale.
Building condition is the second filter. Known structural defects, waterproofing failures or combustible cladding narrow the panel and can reduce the maximum LVR. Building Commission NSW tracks serious defects in residential apartment buildings through biennial research, and newer registered buildings show lower defect rates than earlier ones. Where defects exist, statutory warranties run six years for major defects and two years for minor ones.
High-density postcodes add a third layer, which our location guide covers.
How do levies affect your borrowing power?
Levies are a fixed commitment, so a servicing assessment counts them against income the same way it counts any other ongoing cost. A $6,000 annual levy reduces the amount a lender will advance, which is why the levy figure belongs in the calculation early.
This is the part buyers rarely price in. A servicing assessment adds committed outgoings to declared living expenses, and strata levies are as committed as it gets. They are not discretionary and they do not stop.
The practical effect is that two apartments at the same purchase price can support different loan sizes. A $4,000 levy against a $10,000 levy is a $6,000 annual difference in committed expenditure, and a lender treats that gap the way it treats any other fixed cost. Buildings with pools, lifts, gyms and concierge services deliver the amenity and the levy together.
Which is why the levy figure belongs in the borrowing calculation at the start rather than after an offer. Our pre-approval guide covers how serviceability is assessed, and our mortgage repayment calculator models the repayment side.
Frequently asked questions
What do strata levies cover?
Building insurance, common area maintenance, structural repairs, shared facilities, administration, and contributions to the capital works fund for major future works. Levies do not cover anything inside the lot, so contents insurance and internal repairs remain the owner's.
What is a special levy?
A one-off contribution raised when the capital works fund cannot cover a project, commonly waterproofing, roofing, lifts or fire safety upgrades. Amounts of $5,000 to $15,000 or more per lot are not unusual, and liability follows ownership rather than who was there when it was approved.
Is there a minimum apartment size for a home loan?
Yes, and it varies by lender. Most sit around 40 to 50 square metres of internal living area, excluding balconies and car space. Some accept 35 square metres for a studio or one bedroom while requiring 60 for two or more. A studio below the threshold can be unfinanceable at much of the panel.
Do building defects affect getting a loan?
They can. Known structural defects or combustible cladding narrow which lenders will accept the building as security and can reduce the maximum LVR. In NSW, statutory warranties run six years for major defects and two years for minor ones.
Do strata levies affect how much you can borrow?
Yes. A servicing assessment treats levies as a committed ongoing expense, so a higher levy reduces borrowing capacity. Two apartments at the same price can support different loan sizes if one sits in a building with a pool, lift and concierge and the other does not.
Can you renovate a strata unit?
Cosmetic internal work such as painting and flooring is generally straightforward. Structural changes, anything touching common property, and work in wet areas usually require owners corporation approval. External changes are heavily restricted. The by-laws for the specific scheme set the boundaries.
What is the difference between strata, community and company title?
Strata title is the most common and the most widely accepted as loan security. Community title covers larger developments with multiple buildings. Company title involves owning shares in a company that owns the building, and some lenders will not finance it at all.
How do strata levies compare with house maintenance costs?
Levies are regular and predictable where house maintenance arrives unevenly and falls entirely on one owner. Levies also cover building insurance and common area work, and schemes negotiate bulk rates. The trade-off is that levy amounts are set collectively rather than by the individual owner.
Take the next step
On a strata purchase the building matters as much as the lot, both for what it costs to live in and for whether a lender will take it. Our budgeting guide covers running costs, our bank valuations guide covers how the property is assessed, and the NSW First Home Owner Grant of $10,000 applies to new homes only, up to $600,000 for a completed new home. Model the numbers with our property deposit calculator and home equity calculator.
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Related resources for first home buyers
Property type comparison | Freestanding properties | Location and condition | Bank valuations | Pre-approval | Off the plan | First home buyers journey
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This article is general information only and does not take your personal circumstances into account. Strata legislation, levy amounts, by-laws, lender minimum floor areas, building policy and LVR limits vary between schemes and lenders and change over time. Strata provisions described here are specific to New South Wales. Figures were verified in July 2026 against published lender floor area guidance, NSW Building Commission guidance on building defects and statutory warranties, and Revenue NSW First Home Owner Grant thresholds. Confirm your position with a licensed conveyancer, solicitor, broker or lender before relying on it. Ali Hasani is an Authorised Credit Representative (CRN 567392) of Connective Credit Services Pty Ltd (Australian Credit Licence 389328).
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