The 10-Year Capital Works Fund Plan for NSW Strata Schemes

How owners corporations can budget for major repairs and future building expenditure

A well-prepared 10-year capital works fund plan gives an owners corporation a practical roadmap for major repairs, replacement and renewal of common property. It helps owners understand what their building may need, when the work may be required and how much should be set aside through capital works fund levies.

For strata schemes across Sydney and the NSW South Coast, this planning is particularly important. Older apartment buildings, coastal exposure, water ingress, lifts, fire systems, balconies, roofs, retaining walls, pools and rising construction costs can all create substantial future liabilities.

Ellouise Tyrrell Strata Management (ETSM) and Essential Strata Management help owners corporations turn technical forecasts into clear budgets, meeting decisions and practical maintenance programs. ETSM supports schemes across Sydney's Eastern Suburbs, Inner West and Lower North Shore. Essential Strata Management provides local strata management from Nowra to Eden on the NSW South Coast.

This guide explains the current NSW requirements, including the standard form introduced on 1 April 2026, and shows committees how to make a capital works plan genuinely useful.

What is a capital works fund in NSW strata?

The capital works fund is the owners corporation's reserve for capital expenses involving common property. It was previously known as the sinking fund.

The fund may be used for major repair, replacement or renewal projects such as:

repainting common property;

roof, gutter and stormwater renewal;

balcony and waterproofing repairs;

façade restoration and concrete remediation;

lift replacement or major modernisation;

plumbing, electrical and fire-safety infrastructure;

replacement of common-property windows, doors or fixtures where the owners corporation is responsible;

driveways, paths, retaining walls, fences and gates;

pool plant, pumps and other shared equipment;

project management, engineering and professional supervision connected with capital works; and

approved sustainability infrastructure such as solar, batteries or electric-vehicle charging systems.

This is different from the administrative fund, which generally covers recurring day-to-day expenses such as cleaning, gardening, insurance, utilities, routine servicing and strata management fees.

What is a 10-year capital works fund plan?

A 10-year capital works fund plan is a forecast of major common-property expenditure over the next decade. It should identify relevant assets and projects, estimate when work will be required, forecast likely costs and show how the owners corporation can build sufficient funds over time.

The plan is sometimes called a sinking fund forecast, capital works forecast or maintenance forecast. Whatever name is used, it should function as more than a compliance document. A useful plan connects the physical condition of the building with the scheme's long-term financial strategy.

The plan does not, by itself, authorise every project or lock the owners corporation into an exact date or contractor. It is a planning tool. Budgets, levies, contracts and major works still require the appropriate resolutions and approvals under the legislation, the scheme's delegations and its meeting procedures.

Is a 10-year capital works plan compulsory in NSW?

Yes, in most NSW strata schemes. Section 80 of the Strata Schemes Management Act 2015 requires an owners corporation to prepare a 10-year plan for its capital works fund.

The key requirements include:

a new scheme must prepare its first plan for the first annual general meeting;

the first plan must take account of the initial maintenance schedule supplied by the original owner or developer;

the owners corporation must review the plan at least once every five years;

a plan may be reviewed, revised or replaced by resolution at a general meeting; and

the annual budget and capital works contributions should take the plan's expected expenditure into account.

The legal five-year review period is a minimum. The NSW Government Capital Works Fund Planner recommends checking the plan each year so the budget and levy strategy can respond to completed work, changed priorities, new defects and construction-cost movements.

A limited exemption can apply to certain two-lot schemes where the buildings are physically detached, no building or part of a building is situated on common property and the owners unanimously resolve not to establish a capital works fund. Committees should confirm that every condition is satisfied before relying on this exception.

The NSW standard form from 1 April 2026

From 1 April 2026, all new and updated 10-year capital works fund plans must use the NSW standard form.

The requirement applies when an owners corporation:

creates the first plan for a new scheme;

revises an existing plan; or

prepares a replacement after the existing 10-year period.

An existing plan does not need to be converted immediately merely because the standard form commenced. The standard form becomes mandatory when that plan is next revised or replaced.

Owners corporations can access the official 10-year capital works fund plan form and the digital planner available through the NSW Strata Hub. The online planner can be especially useful for smaller, less complex schemes. Larger buildings and schemes with major assets or defects may benefit from a quantity surveyor, building consultant, engineer or other suitably qualified specialist.

What should a capital works fund plan contain?

A strong plan should provide enough information for owners to understand both the work forecast and the funding assumptions behind it.

An asset and project schedule

The plan should identify significant common-property assets and likely capital projects. Grouping everything under broad labels such as "repairs" or "maintenance" makes it difficult to test the forecast or update individual items.

Current condition and remaining service life

Timing should be informed by the age, condition, maintenance history and expected service life of each asset. A roof that is twenty years old and already leaking should not be treated the same as a recently replaced roof with supporting warranties.

Estimated timing

Each item should be allocated to a forecast year or planning period. Timing should reflect physical condition, safety, statutory obligations, coordinated project opportunities and the risk of delaying the work.

Realistic cost estimates

Estimates should consider the actual scope, building access, professional fees, approvals, site establishment, GST where applicable and regional contractor mobilisation. A generic rate that ignores scaffolding, traffic control, heritage restrictions or coastal access can materially understate the project cost.

Cost escalation and inflation

Future costs should be escalated using a transparent assumption. Building-cost inflation can differ from general consumer inflation, so committees should review the adopted rate rather than leaving an old percentage unchanged for years.

Current fund balance and expected contributions

The plan should start with the actual capital works fund balance and show the proposed contribution pathway. The NSW digital planner includes fields for current balances, GST status, unit entitlements and capital works levies.

Contingency

A reasonable contingency can help manage uncertainty, but it is not a substitute for proper inspection and scoping. Hidden damage, design changes and market conditions can still cause the final price to exceed the forecast.

How is a capital works fund plan prepared?

The process should be proportionate to the size, age and complexity of the scheme.

Collect the records. Review previous plans, financial statements, minutes, defect reports, warranties, maintenance records, insurance information, compliance reports and completed project costs.

Inspect the common property. Confirm the present condition of major assets and identify deterioration, safety concerns or work already approaching the end of its service life.

Build the asset register. Record each relevant building element or project separately enough to support meaningful timing and costing.

Prioritise the work. Consider safety, statutory compliance, water ingress, structural risk, asset protection and opportunities to coordinate related projects.

Estimate present-day costs. Use current quotations, recent project experience or specialist cost advice and include access, consultants, approvals and project management.

Forecast future costs. Apply an explained escalation assumption to expenditure occurring later in the 10-year period.

Model the funding. Compare the current reserve and proposed contributions with expected expenditure, while avoiding unnecessary negative balances or abrupt levy shocks.

Present the plan clearly. Owners should be able to trace the forecast projects, assumptions, annual expenditure and levy recommendations.

Approve and implement it. Put the plan and resulting budgets or levies to the appropriate meetings with clear explanatory material.

Review it regularly. Reconcile actual costs, completed work and new information at least annually, with a formal review at least every five years.

Can a strata committee prepare the plan itself?

The plan may be prepared with input from the treasurer, other committee members, the strata manager or an independent expert. The right approach depends on the building.

A small scheme with simple assets, sound records and no known defects may be able to use the NSW digital planner with appropriate care. A complex apartment building with lifts, basement waterproofing, fire systems, pools, façade issues or staged remedial works is likely to need specialist inspection and cost advice.

Engaging a professional does not remove the committee's role. Owners should still test the scope, assumptions, timing and funding strategy. Conversely, preparing a spreadsheet internally does not remove the owners corporation's responsibility to make reasonable, evidence-based provision for future work.

How does the plan affect strata levies?

The owners corporation sets annual contributions to its administrative and capital works funds. The 10-year plan provides the forward-looking evidence needed to decide how much should be raised for capital works.

A well-designed funding pathway aims to:

accumulate funds before large projects fall due;

spread contributions more fairly across the owners who benefit from the building over time;

reduce sudden levy increases;

maintain a prudent reserve for forecast expenditure; and

give prospective purchasers and current owners a clearer view of the scheme's financial position.

The plan does not guarantee that levies will remain unchanged. If an inspection identifies urgent waterproofing, structural or fire-safety work, the owners corporation may need to increase contributions or raise a special levy. Deferring necessary work solely to keep levies low can increase the eventual repair cost and expose the building to further damage.

Capital works fund contributions are paid to the owners corporation, not held for an individual owner. An owner who sells a lot is not entitled to a refund of unused contributions.

Can a scheme still need a special levy?

Yes. A current capital works fund plan reduces surprises but cannot eliminate them.

A special levy or other funding arrangement may still be needed when:

an urgent defect or safety issue was not reasonably foreseeable;

hidden damage is discovered after work starts;

actual tenders exceed the forecast allowance;

inflation, access or compliance requirements change materially;

earlier levies were set below the plan's recommended level;

several projects need to be brought forward; or

insurance proceeds or other expected funding are insufficient.

When this occurs, owners should receive a clear explanation of the revised scope, funding gap, project urgency and available options. The plan should then be updated so it does not continue to rely on superseded figures.

A 10-year plan does not replace the duty to repair common property

An owners corporation's duty to properly maintain and keep common property in a state of good and serviceable repair exists independently of the forecast.

A project cannot simply be ignored because it was scheduled for a later year in an old plan. If a roof is leaking, concrete is becoming unsafe or essential equipment has failed, the owners corporation should respond to the actual condition and obtain appropriate advice. The capital works plan should be revised to reflect the changed circumstances.

Common capital works planning mistakes

Treating the plan as a once-every-five-years document

Five years is the statutory minimum review interval, not best practice for day-to-day governance. An annual check keeps forecasts aligned with work completed, current costs and the building's condition.

Using estimates without inspecting the building

Asset lives and generic rates are starting points only. They do not identify active leaks, corrosion, drainage failures or hidden deterioration.

Omitting professional and access costs

Consultants, design, approvals, scaffolding, craneage, traffic control, temporary protection and project supervision can represent a significant part of the final cost.

Assuming the lowest levy is the best outcome

Persistently underfunding the capital works fund can transfer a larger burden to future owners and increase the risk of urgent special levies.

Failing to connect related projects

Roof replacement, solar installation, façade access and painting may be cheaper and less disruptive when coordinated. Poor sequencing can mean paying for access or reinstatement twice.

Ignoring completed projects and actual costs

The plan should be reconciled after major work. Actual tender and completion costs provide valuable evidence for the next forecast.

Confusing the forecast with approval to spend

Including a project in the plan does not necessarily authorise a contract. The owners corporation must still follow the required resolutions, spending authorities, procurement process and terms of its strata management agreement.

Capital works planning for Sydney strata schemes

Capital works forecasts for Sydney's Eastern Suburbs, Inner West and Lower North Shore often need to address ageing building fabric alongside complex access and high metropolitan construction costs.

In suburbs such as Coogee, Randwick, Kingsford, Maroubra, Bondi, Waverley and Paddington, salt exposure, older façades, balconies and waterproofing can create recurring maintenance priorities. Inner West schemes in Marrickville, Newtown and Petersham may also manage older brick buildings, heritage considerations, roofs, windows and constrained access.

Lower North Shore buildings in North Sydney, Lavender Bay, Kirribilli, Neutral Bay, Cremorne and Mosman may have lifts, basements, retaining structures, pools, mechanical systems and larger staged projects requiring specialist consultants and detailed procurement.

ETSM helps Sydney strata committees coordinate capital works forecasts with annual budgets, maintenance records, meeting agendas and project planning. The owners corporation retains the decision-making role; our job is to make the information and process clear, organised and actionable.

Capital works planning on the NSW South Coast

South Coast strata schemes face a distinctive combination of environmental exposure and regional delivery costs.

Buildings from Nowra and Jervis Bay through Milton, Mollymook, Ulladulla, Batemans Bay, Batehaven, Moruya and Narooma to Bermagui, Bega, Tathra, Merimbula, Tura Beach, Pambula and Eden may need to plan for:

salt-driven corrosion to balustrades, fixings, concrete reinforcement and plant;

wind-driven rain, storms, roofing and drainage performance;

waterproofing and water-ingress remediation;

bushfire-related access, materials or risk-reduction work;

retaining walls, steep sites and shared driveways;

pool, landscaping and holiday-complex infrastructure;

contractor travel, accommodation and mobilisation costs;

reduced contractor availability during busy periods; and

communication with owners who live in Sydney, Canberra or interstate.

Essential Strata Management combines local knowledge with disciplined financial planning. A realistic South Coast capital works plan should account for the actual contractor market and site conditions, not simply reuse metropolitan assumptions or generic national rates.

How ETSM and Essential Strata Management can help

The strata manager does not replace the owners corporation, building consultant, engineer or quantity surveyor. A good manager coordinates the governance and administration that allow those parties to work effectively.

Depending on the agency agreement and delegated authority, ETSM and Essential Strata Management can assist by:

organising existing plans, reports, warranties and maintenance records;

helping the committee identify when specialist inspection or cost advice is needed;

coordinating quotations and consultant proposals;

presenting capital works forecasts, budgets and levy options in understandable terms;

preparing meeting motions and explanatory papers;

maintaining clear decisions and financial records;

monitoring forecast expenditure against actual project costs;

coordinating approved contractors and consultants;

communicating progress to resident and non-resident owners; and

prompting regular review of the plan as circumstances change.

This joined-up approach helps the owners corporation move from a static forecast to a practical program of funding, approvals and well-sequenced work.

Capital works fund plan checklist for committees

Before adopting or updating a plan, ask:

Is the plan on the current NSW standard form where required?

Has the common property been inspected recently enough for the forecast to be reliable?

Does the plan identify all material assets and known projects?

Are the timing assumptions consistent with condition reports and maintenance history?

Do cost estimates include consultants, approvals, access, GST and project management?

Is the escalation rate explained and still realistic?

Does the opening balance match the scheme's financial records?

Are proposed contributions sufficient to fund the forecast without unexplained negative balances?

Have urgent defects or statutory works been prioritised appropriately?

Are completed projects and actual costs reflected?

Has the owners corporation approved the plan, budget and levies through the correct process?

Is an annual check scheduled, with a formal review no later than five years?

Frequently asked questions about 10-year capital works fund plans in NSW

How often must a NSW capital works fund plan be reviewed?

The owners corporation must review its plan at least once every five years. NSW Government guidance recommends reviewing it annually to improve budgeting and levy planning.

Must an existing plan immediately be converted to the new standard form?

No. From 1 April 2026, the standard form is required for a new plan and when an existing plan is revised or replaced. A current plan does not need immediate conversion merely because the new form commenced.

Who can prepare a 10-year capital works plan?

The plan may be developed with input from the treasurer, committee, strata manager or an independent expert. Quantity surveyors and building consultants are commonly engaged for larger, older or complex schemes.

Is a sinking fund forecast the same as a capital works fund plan?

The terms are often used interchangeably. "Capital works fund" is the current NSW strata terminology; "sinking fund" is the former term and remains common in searches and older records.

Does the capital works plan set the levy automatically?

No. The owners corporation sets contributions through its budget and meeting resolutions. The plan supplies the forecast information that should inform those decisions.

Can capital works money be used for routine expenses?

The capital works fund is intended for capital expenditure and associated purposes. Routine recurring expenses are generally paid from the administrative fund. The correct fund depends on the nature of the expense and the legislation.

What happens if the capital works fund is insufficient?

The owners corporation may need to increase regular contributions, raise a special levy, stage the work or consider another lawful funding option. Urgent maintenance should not be deferred without considering the statutory duty to repair common property.

Should inflation be included in a 10-year forecast?

Yes. Future project costs should use a clear escalation assumption. That assumption should be reviewed regularly because construction-cost movements may differ from general inflation.

Is the cheapest capital works plan adequate?

Not necessarily. The value depends on the quality of inspection, asset schedule, cost data, assumptions and practical recommendations. A low-cost generic forecast can be expensive if it materially understates future work.

Can owners receive their capital works contributions back when they sell?

No. Contributions belong to the owners corporation's fund and are not refunded to an owner on sale.

Plan early, review regularly and communicate clearly

A credible 10-year capital works fund plan protects more than the scheme's bank balance. It supports safer buildings, fairer funding, informed owners and better-timed maintenance.

For strata management in Sydney's Eastern Suburbs, Inner West or Lower North Shore, learn more about Ellouise Tyrrell Strata Management.

For local strata management across the NSW South Coast from Nowra to Eden, visit Essential Strata Management.

Both teams can help your owners corporation connect its capital works forecast with practical budgets, transparent meetings and coordinated building maintenance.

Need help turning your capital works forecast into a practical funding and maintenance plan? Explore ETSM strata management in Sydney or contact Essential Strata Management on the NSW South Coast to request a tailored proposal for your owners corporation.

The following official resources support the legislative and regulatory information in this article:

NSW Government - Capital Works Fund Planner

NSW Government - 10-year capital works fund plan standard form

NSW Government - Managing strata finances and insurance

NSW Government - Guide to the 2026 strata law changes

NSW Government - Repairs and maintenance in strata

NSW Government - Strata building repairs health check

NSW Legislation - Strata Schemes Management Act 2015, section 80

NSW Legislation - Strata Schemes Management Act 2015, section 81

NSW Legislation - Strata Schemes Management Act 2015

NSW Legislation - Strata Schemes Management Regulation 2016

General information only. NSW strata legislation, standard forms, building conditions, project costs and individual scheme circumstances can change. This article is not legal, engineering, building, quantity-surveying or financial advice. Owners corporations should obtain professional advice relevant to their scheme and confirm current requirements before making decisions.