- Strata properties can be more affordable and lower-maintenance, but ownership comes with ongoing fees and shared decision-making.
- You don’t own the land outright, instead you own your individual lot and share responsibility for common areas with other owners.
- Rules, levies, and costs can vary widely, so it’s important to understand the by-laws, fees, and long-term obligations before buying.
If you're hunting for an Australian property, there will largely be two types of title available to you: Freehold or strata. A person who owns a freehold property owns the property itself as well as the block of land it stands on. By contrast, someone who owns a strata property owns their individual portion - typically an apartment or townhouse - and shares ownership of the rest of the property.
What is a strata title property?
Strata titles are common among properties broken down into ‘lots’, like units, apartments, or townhouses. An owner of a 'lot' only has sole ownership over the lot itself.
Owners can generally make changes within their four walls, though they may need approval if the changes could affect common property or other lot owners.
Under a strata title, a lot owner also shares ownership of common property. Common property areas - like hallways, lifts, gardens, and building exteriors - are collectively owned and maintained by all lot owners through an owners corporation, body corporate, or strata company.
Savings.com.au’s two cents
With house prices the way they are, strata title property can provide a cut-price way for you to enter the property market without compromising on features. Though, the fees that come attached through strata levies may outweigh the benefits for some.
Whether you are taking your first steps into the property market, investing or simply looking to downsize, it’s important to consider your financial position and future outlook before making any property decisions.
The role of an owners corporation or body corporate
An owner’s corporation or body corporate in a strata building maintains and manages the common property. This legal entity is either made up of all lot owners or those elected to sit on the board.
An owner’s corporation or body corporate can also make rules which are binding on the owners and tenants regarding the use of common property and introduce by-laws that suit the residents of the strata scheme.
What are strata fees and levies?
Because all owners have a shared interest in common property, they're also responsible for contributing to its upkeep - this is where strata fees come in.
Typically charged quarterly, strata fees (also known as body corporate fees) cover the cost of maintaining and insuring common property. In many cases, this means individual lot owners don't need to take out separate building insurance.
Once collected, strata fees are usually split between two funds: an administration fund and a sinking fund.
- Administration fund
This fund covers day-to-day expenses, such as regular maintenance, insurance premiums, and routine repairs. - Sinking fund
The sinking fund acts as the building's long-term or 'rainy day' fund, containing money set aside for major or less frequent expenses, such as significant repairs or works.
What are strata special levies?
Owning a strata property can also involve special levies. These are additional charges imposed on lot owners when major repairs or works arise that can't be covered by the sinking fund.
Issues like repairing lifts, addressing structural defects, or rectifying subsidence can cost far more than what's been set aside. When that happens, owners may be required to contribute extra funds to cover the shortfall.
What are strata owners responsible for?
Owning a strata title property comes with a different set of responsibilities compared to a standalone home, as decision-making and upkeep are shared across the building or complex. As a lot owner, you’re generally responsible for:
- Complying with strata by-laws
These may cover things like noise, pets, renovations, parking, smoking, and short-term letting. - Paying strata fees and levies
- Seeking approval for certain changes
Particularly renovations or installations that could impact common property or other residents (such as structural works, air-conditioning units, or flooring changes). - Notifying the owners corporation or body corporate of changes
Including if you sell your property, change tenants, or update your contact details. - Participating in strata decisions (if you choose)
You might decide to attend meetings, vote on motions, or join the owners corporation or committee.
Pros and cons of strata title property
When deciding whether a strata title property is right for you, it's important to weigh up both the benefits and drawbacks.
Pros of owning a strata property
- Lower maintenance burden, as common areas are managed by the owners corporation rather than individual owners
- Affordability and location, allowing first-home buyers, retirees, or downsizers to live in areas that may otherwise be financially out of reach
- Access to shared amenities, such as pools, gyms, gardens and entertaining areas, which are maintained collectively
- Community living, with opportunities to be involved in the day-to-day management of the building
Cons of owning a strata property
- Ongoing strata levies, which are usually paid quarterly and can increase over time
- Separate council rates and utilities, which are charged per lot rather than for the building as a whole
- Limited control, particularly if the owners corporation is inefficient or slow to act
- By-law restrictions, which may limit pets, renovations, or certain uses of the property
- Linked property values, as your home's value is influenced by the condition and value of other lots in the complex
In the market for a new home? It could be worth thinking about your home loan options. Here are some of the most competitive mortgage products on the market right now:
Lender Home Loan Interest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees Max LVR Lump Sum Repayment Extra Repayments Split Loan Option Tags Features Link Compare Promoted Product Disclosure
Promoted
Disclosure
Promoted
Disclosure
Promoted
Disclosure
Disclosure
