How to read a strata 10-year plan, and tell if your levies are about to jump

The 10-year plan is the most useful document in a strata information pack, and it is the one almost nobody reads past the first page. It is usually forty pages of tables. Buried in it is the answer to the question every buyer and every owner actually wants answered: are the levies about to go up?

You do not need to read all forty pages. You need four numbers and one line of arithmetic.

Which schemes have to have one

A scheme with 10 or more lots must have a 10-year plan, and must have a reserve fund to go with it. That comes from section 100 of the Strata Titles Act 1985. The plan has to be revised at least once every 5 years, and when it is revised it gets extended to cover the following 10 years.

Smaller schemes can have one voluntarily, and some do. If you are buying into a scheme of nine lots or fewer and there is no plan, that is not a red flag on its own. It does mean nobody has costed the roof.

What it does not cover

This is the first thing people get wrong. The 10-year plan is only for the big, non-routine work: roofs, windows, lifts, repainting, driveways. Cleaning, gardening, lift service contracts, insurance and light bulbs are not in it. Those come out of the administrative fund and appear in the annual budget instead.

So a 10-year plan is not a picture of what the scheme spends. It is a picture of what is coming.

The four numbers to find first

• The opening reserve fund balance. What is actually in the account now. It is on the report inputs page near the front, and again as the first figure in the cash flow table.
• The current reserve levy. Usually expressed per unit entitlement, and as a total for the scheme.
• The levy the plan recommends for next year. It sits in the levy table, in the row for year 2.
• The biggest year of spending, and when it lands. Run your eye down the expenses column and find the largest number.

If the year 2 levy is much higher than the year 1 levy, an increase has already been recommended. The owners can adopt it, phase it, or ignore it, but somebody has put it in writing.

The one line of arithmetic

Every 10-year plan runs on the same sentence, and most of them print it:

Opening balance, plus levy contributions, plus interest, less anticipated expenses, equals closing balance.

Each year the closing balance becomes next year opening balance. Once you see it, the big table stops being intimidating, because you are only ever checking one thing: does the balance stay positive when the big jobs land?

A real example, anonymised

Take a 20-lot walk-up in Mount Lawley, registered in 1971, with a lift. Its current plan was prepared in June 2026. The numbers below are the real ones.

• Reserve fund balance at the start: about $27,500.
• Current reserve levy: it raises about $95,000 a year across the scheme.
• Recommended levy from next year: $132,000. That is a rise of roughly 39 per cent.
• Assumed inflation for building costs: 2.9 per cent a year.

Why the jump? Because in year 6 the plan carries around $556,000 of work in a single year: the roof, the windows and lintels, and the access equipment needed to reach them. In year 12 the lift comes up at about $335,000.

On the current levy the fund would not survive year 6. On the recommended levy it drops from about $482,000 down to $81,000 in that year, which is tight but it holds. Then it rebuilds in time for the lift.

The inspector did not leave it to the reader to work out. His note at the back says the current levies are too low to maintain the property over the next 15 years. That note is worth more than the whole table, and it is on page 25.

So will the levies rise, or hold?

Four checks, in order:

• Compare year 1 with year 2 in the levy table. A jump means a rise is already recommended.
• Then look at the year-on-year rises after that. If they climb by roughly the inflation rate the plan assumes, around 2 to 3 per cent, the plan is in steady state and the levy is only keeping pace with costs.
• Follow the closing balance line. If it dips to near nothing in any year, that is a special levy waiting to happen, because the money has to come from somewhere.
• Read the inspector notes at the back. They are written in plain English and they usually say the thing the tables imply.

A scheme that has already put its levies up, and whose balance stays comfortably positive through the worst year, is in better shape than a scheme with low levies and a balance that flatlines. Low levies are not good news. They are often just deferred news.

Three traps

A large balance at the end is not spare money. These plans are often calculated over 20 years and only print 15. The healthy-looking closing balance in the final year is being saved for work in years 16 to 20.

The costs are estimates, not quotes. They are current prices inflated forward. The plan usually says so, and adds a contingency, often 10 per cent, on top.

The plan is a recommendation, not a decision. Owners can adopt it, change the timing, or do nothing. To find out what is actually being charged, read the approved budget and the AGM minutes, not the plan. All three are in the information pack for a reason.

What it means when you buy or sell

If you are buying, the 10-year plan tells you whether the price you are paying comes with a bill attached. A scheme that has costed its work and is funding it is worth more to you than one that has not, even if its levies are higher today.

If you are selling, the plan is going to be read by every serious buyer, so it is better that you know what it says first. If the levy is rising, there is usually a good reason and it can be explained. What loses a buyer is finding it out on their own halfway through the campaign.

This is part five of our series on strata levies and paperwork in Perth. Part four explains which schemes must have a 10-year plan in the first place.

If you want to know what a scheme paperwork means for the price your property would achieve, ask us for an appraisal and we will go through the plan with you line by line.

One thing to know before you rely on getting it

The 10-year plan is not on the list of documents a seller has to give a buyer before they sign.

The seller’s pre-contractual disclosure under section 156 of the Strata Titles Act 1985 covers the scheme plan, the by-laws including any made but not yet registered, the schedule of unit entitlements, the scheme notice for schemes created on or after 1 May 2020, the minutes of the most recent annual general meeting plus any extraordinary general meetings since, and the last statement of accounts. The 10-year plan is not in that list. Neither are insurance policies, quotations, engineering reports or defect histories.

So if you want it, you ask for it. Two ways: ask the seller or the selling agent, or apply to the strata company directly under section 107 of the Act, which is the buyer’s own right to inspect records and obtain certificates, for the prescribed fee.

KPR includes the 10-year plan in the strata information pack whenever the scheme has one, because a buyer who can see the plan bids with more confidence, and a seller who hands it over early does not get a price renegotiation late.

The whole series

• Part 1. Which kind of strata scheme is it?
• Part 2. What your strata levies actually pay for
• Part 3. Who insures the building?
• Part 4. What changes with the size of the scheme
• Part 5. How to read a 10-year plan (you are here)
• Part 6. By-laws, and what unpaid levies mean at settlement
• Part 7. What a seller must tell you before you sign

This article is general information about how strata schemes work in Western Australia. It is not legal, financial or tax advice. The example figures are from one real scheme and are used to show how a plan is structured, not as a guide to any other scheme. Always read the plan, budget and minutes for the particular scheme you are interested in.

By James Yeoman, Director of KPR Perth Pty Ltd T/A Key Performance Real Estate