With the 1 April 2026 NSW strata reforms upon us, first-year levy setting for new multi-storey schemes is under increased scrutiny. For the first time, both the Initial Maintenance Schedule (IMS) and first-year levy estimates must be reviewed and certified by an independent surveyor.
This means levy budgets for administration and capital works funds must genuinely reflect expected expenditure, not placeholders or optimistic assumptions. Here’s how to get it right.
1. Base Maintenance Activity Levies on the Initial Maintenance Schedule
Generic levy templates will no longer pass certification. Administration fund maintenance activity estimates must be grounded in the costings that fall in Year 1 of the initial maintenance schedule. The stronger the data, the smoother the certification.
2. Practical Implications Clearly Seperate Admin and Capital Works Costs
Administrative fund levies cover immediate day-to-day costs that appear in the initial maintenance schedule along with all the professional fees and expenses (e.g. Insurance premiums, strata management fee etc.). Capital works levies must reflect long-term replacement obligations (e.g. Carpet replacement, interior and exterior painting etc.). A common pitfall is under-allowing for capital works because the building is new. Capital works levies need to be consistent with a 10-year lifecycle to avoid underestimations and extreme levies hikes in later years. Independent certification will assess whether contributions are reasonable, not minimal.
3. Use the New Standard Form Early
The new prescribed initial maintenance schedule form should be used from the outset. This ensures consistency across documents, reduces revisions during certification, and presents a compliant, professional package to the owners corporation.
4. Benchmark Levies Against Real-World Data
Engage with your strata manager as they can provide real life benchmark levy estimates for properties of a similar nature. Independent surveyors will also benchmark these against industry norms, so figures must reflect real-world costs.
5. Engage an Independent Surveyor Early
Certification is required at least 14 days before the first AGM. Engaging early allows time to review drafts, identify gaps, adjust levy estimates, and avoid delays or non-compliance. Independent surveyors should be part of your delivery process, not an afterthought.
Final Takeaway
The 2026 reforms are about transparency and credibility. Developers who set realistic, well-supported levies and engage independent certification early will deliver smoother handovers, reduce disputes, and build long-term trust with owners.