The strata capital works fund and 10-year plan in NSW

Big strata expenses — repainting the building, replacing a roof, refurbishing a lift — do not come cheap, and they do not come often. The capital works fund and its 10-year plan exist so the money is there when they do, instead of landing on owners as a sudden special levy. Here is how it works in NSW.

What the capital works fund is

Every strata scheme (other than some two-lot schemes) must have two funds: the administrative fund for day-to-day running costs, and the capital works fund (under section 74 of the Strata Schemes Management Act 2015) for major, less-frequent expenses — capital repairs, replacement and improvement of common property. The capital works fund is the building’s long-term savings account.

Why the 10-year plan

You cannot save sensibly for costs you have not forecast — so the owners corporation must prepare and maintain a 10-year capital works plan (section 80). It estimates the major works the building will need over the next decade and what they will cost, so levies can be set to build the fund up gradually rather than hitting owners with a shock bill. The plan is reviewed and updated as time passes.

What the plan covers

A good 10-year plan lists the major capital items — roof, external painting, common-area flooring, lifts, fences, waterproofing, plumbing and electrical infrastructure — with an estimated timing and cost for each, and the annual contribution needed to fund them. It is both a compliance document and a genuinely useful budgeting tool.

The new standard form — from 1 April 2026

From 1 April 2026, the 10-year plan must use a new standard form. This applies when you revise an existing plan, or prepare a new plan to replace one that has already run its 10 years — if you have a current plan you are not yet revising, you do not have to switch immediately. The standard form makes plans consistent and easier for owners to read. (New sustainability-infrastructure costs — like solar or efficient lighting — should also be factored into capital works estimates since the 2025 reforms.)

How to fund it

Funding the plan means translating those future costs into today’s levies. Work out the total expected spend over the plan period, subtract the fund’s current balance, and spread the gap across the years as the annual capital works contribution. Set it too low and you will face special levies; set it sensibly and the fund grows to meet the works.

How levies feed the fund

Owners contribute to the capital works fund through their quarterly levies, apportioned by unit entitlement — the same basis as administrative-fund levies. The AGM sets the contribution when it approves the budget. The key discipline is that capital works contributions are saved toward the plan, not spent on day-to-day costs.

Keeping the fund separate

This is the rule that catches schemes out: the administrative fund and the capital works fund must be kept separate, and money cannot simply be spent across them. You can borrow between funds in limited circumstances, but it must be repaid (generally within three months). Commingling the two — paying a capital expense from the admin fund, or vice versa, without a proper transfer — is exactly the kind of thing that fails an audit.

Doing it the easy way with OneStrata

• Two funds, never mixed. OneStrata keeps the administrative and capital works funds as separate ledgers by design — the foundation of compliant strata books.
• Levies that feed the fund. Set the capital works contribution, apportion it by unit entitlement, and watch the fund build with each quarter’s levies.
• Budget against the plan. Track projected versus actual so you can see whether the fund is on course for the works ahead.
• An audit-ready trail. Every contribution and transfer is recorded immutably — so fund separation is provable, not just claimed.

Capital works fund checklist

• Maintain a current 10-year capital works plan
• Move to the standard form when you next revise or replace the plan
• List major works with estimated timing and cost
• Set the annual capital works contribution to fund the plan
• Apportion contributions by unit entitlement and approve them at the AGM
• Keep the capital works fund strictly separate from the administrative fund
• Repay any inter-fund borrowing (generally within three months)
• Factor sustainability-infrastructure costs into estimates

This guide is general information for NSW strata committees, not legal or financial advice. The capital works fund and 10-year plan are governed by the Strata Schemes Management Act 2015 (including sections 74 and 80); the standard-form requirement commenced 1 April 2026. Always confirm current requirements with NSW Fair Trading (nsw.gov.au). OneStrata is record-keeping and management software for small to medium size strata schemes; it is not a licensed strata managing agent and never holds your funds.

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