More and more Australians are embracing alternatives to the traditional freestanding home on a quarter-acre block (just over 1000sq m) as its cost has become prohibitive for many, especially in our major cities. But apartment blocks, townhouse developments, and the alternatives for older Australians – retirement villages and over-55 communities – have their own financial traps.
Many of these are strata title, meaning you own your apartment or townhouse as well as sharing ownership over “common property”, such as the driveways, foyers, swimming pools and gardens. The common property is managed by a legal entity, usually called the owners’ corporation or the body corporate. To cover these expenses, as well as insuring the building, individual owners pay strata fees, which can be very high.
The more bells and whistles your strata property has – lifts, swimming pools, gyms – the higher the fees. In NSW, for example, average strata fees range from 0.3% to 1.2% of the property’s value: 0.8% to 1.2% with facilities, 0.3% to 0.7% without facilities.
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