Financial Management
In this article
- When special levies are raised and what they fund
- The double-levy threshold and when a 75% vote is required
- How special levies are calculated and distributed
- Notice requirements for a general meeting to approve a levy
- How to challenge a special levy if it has been improperly raised
Not all special levies are avoidable
A well-funded maintenance plan minimises the need for special levies. But unexpected events — storm damage, building defects, urgent compliance works — can make them necessary even in well-run buildings.
A special levy is a one-off financial contribution raised by an owners corporation to fund expenditure not covered by the regular annual budget. Understanding your rights and obligations when a special levy is proposed is essential.
When Are Special Levies Raised?
- Major repair or replacement works (roof, lifts, replumbing, façade restoration)
- Emergency repairs following storm damage, flooding, or fire
- Building defect rectification
- Compliance works required by regulators or building surveyors
- Legal costs for VCAT proceedings or litigation
- Capital improvements approved by the owners corporation
⚖️ Special levy threshold — OC Act 2006
If the special levy is equal to or less than twice the annual fee → ordinary resolution (simple majority). If it is more than twice the annual fee → special resolution (at least 75% of votes cast).
Calculation and Distribution
Special levies are calculated using the same lot liability formula as annual levies, unless the benefit principle under Section 49 applies. Where works benefit some lots more than others, costs must be allocated proportionately based on relative benefit.
Notice Requirements
Lot owners must receive proper notice of the general meeting at which the special levy will be considered — including details of the proposed expenditure, the total amount, each lot owner’s share, and at least 14 days’ written notice.
Can you refuse to pay?
No. Once a special levy has been properly approved by the correct type of resolution, all lot owners are legally obligated to pay their share. Non-payment can result in penalty interest and legal action through VCAT or the Magistrates’ Court.
Challenging a Special Levy
A lot owner who believes a special levy was raised improperly has several options:
- If the wrong resolution type was used (e.g. ordinary resolution where a special was required), the levy may be invalid and challengeable at VCAT
- If the expenditure is unreasonable or not in accordance with OC functions, apply to VCAT for review
- If the benefit principle was not correctly applied, affected lot owners can dispute the allocation
- Always raise concerns with the committee first before escalating to VCAT
Tips for Committees Raising Special Levies
Transparency builds trust
Obtain multiple competitive quotes, present clear and detailed information to lot owners before the meeting, and consider offering payment plans for large levies to ease financial hardship on affected lot owners.
Frequently Asked Questions
🚫 Can the committee raise a special levy without a meeting?
Yes and No. Special levies must be approved at a general meeting (or by postal/electronic ballot if the rules permit) if the amount to be raised is more than twice the annual budget. The committee can impose a special levy if the amount to be raised is less than this amount.
💸 What if I can’t afford to pay a special levy?
Speak with your OC manager or committee about the possibility of a payment plan. Many OCs will arrange instalment payments for large special levies. However, the obligation to pay remains regardless of personal financial circumstances.
📊 How is a special levy different from an increase in annual levies?
Annual levies are ongoing regular contributions that fund the annual budget. A special levy is a one-off charge for a specific purpose — separate from the regular annual levy.
📋 Key takeaways
- Special levies fund expenditure not covered by the annual budget — major repairs, emergency works, legal costs.
- Levies up to twice the annual levy require an ordinary resolution; above that, a special resolution (75%).
- Lot owners must receive at least 14 days’ notice of the meeting at which the levy will be considered (for a General Meeting or ballot) if the amount to be raised is more than twice the annual budget.
- All lot owners are legally obligated to pay a properly approved special levy — refusal can result in legal action.
- If you believe a special levy was improperly raised, raise it with the committee first, then escalate to VCAT.