NSW Capital Works Plans 2026: The New Mandatory Format Explained

The 2026 capital works plan format is not a template change. It requires owners corporations to think 10 years ahead, account for sustainability inclusions, and back the levy schedule with proper life cycle costing. Plans dated before 1 April 2026 do not satisfy the new requirement when they fall due for renewal. Section 80 of the Strata Schemes Management Act 2015 (NSW) has always required a capital works fund. The 2026 amendments to the Regulation changed what a compliant plan must contain.

What is a Capital Works Fund and Why Does It Exist?

Section 80 of the Strata Schemes Management Act 2015 (NSW) requires every owners corporation to establish and maintain a capital works fund. The purpose of this fund is to meet the cost of anticipated major maintenance, repair, and replacement of common property over time. It is distinct from the administrative fund, which covers recurring operating costs such as insurance, gardening, and minor repairs.

The capital works fund is levy-funded. Owners contribute proportionally based on their lot entitlement. The fund accumulates over time and is drawn down as major works are required. A well-managed capital works fund means that when the roof needs replacing, the money is there. A poorly managed fund means a special levy - often tens of thousands of dollars per lot, raised at short notice.

The consistent finding from NSW strata data is that the majority of capital works fund shortfalls arise from inadequate planning rather than unexpected events. Roofs, waterproofing membranes, lifts, and concrete facades all have known design lives. Their replacement costs are foreseeable. Underfunding is a planning failure, not a surprise.

Why the 2026 Format Changed

The Strata Community Australia (SCA) and NSW Fair Trading identified two systemic problems with capital works planning as it was practised.

First, the planning horizon was too short. Many plans covered only 5 years, which is adequate for near-term maintenance but fails to capture the major expenditure cycles of building elements with 10 to 20-year design lives. A 5-year plan prepared in year 1 of a building's life will show low expenditure (everything is new). The same building in year 6 will face waterproofing, sealant, and mechanical replacement costs that the earlier plan never modelled.

Second, sustainability and climate considerations were absent from planning frameworks. As EV charging infrastructure, solar panels, and energy management systems become practical considerations for strata buildings, their capital cost must be planned rather than treated as a surprise special levy item.

The 2026 amendments address both problems directly.

What the New Format Requires

The updated requirements under the Strata Schemes Management Regulation 2016 (NSW) as amended, effective 1 April 2026, mandate the following elements.

10-Year Rolling Forecast (Minimum)

The plan must project forward a minimum of 10 years from the date of preparation. Each year in the forecast must show:

• Anticipated capital expenditure by building element category
• Estimated cost in current (base year) dollars
• Levy contribution required to fund the projected expenditure
• Opening balance, contributions, expenditure, and closing balance for each year

A 10-year horizon is the minimum. For buildings with elements having 15 to 25-year replacement cycles (concrete facades, major hydraulic services, building skins), a longer horizon is better practice.

Life Cycle Costing by Major Element

The plan must document the anticipated life cycle for each major building element and derive replacement cost estimates from that life cycle. The elements that must be individually assessed include:

These are guide ranges. Every building differs. The plan must use building-specific data, not generic industry averages, particularly for buildings over 15 years old where the condition of elements is material.

Sustainability Inclusions

This is the new 2026 addition. The plan must include an assessment of sustainability inclusions relevant to the building. "Assessment" does not mean the owners corporation must fund every item - it means the committee must actively consider them and document that consideration.

Items that fall within sustainability inclusions include:

• EV charging infrastructure: Conduit installation to car spaces, sub-metering, load management systems
• Solar photovoltaic systems: Rooftop capacity assessment, inverter systems, common area power offset
• Energy efficiency upgrades: LED common area lighting, building management system optimisation, insulation upgrades
• Water efficiency: Rainwater harvesting, irrigation system upgrades, water-efficient fixtures in common areas
• Climate resilience: Drainage capacity for increased rainfall intensity, shading, thermal performance

The sustainability section should reference relevant NSW Government guidance, including the NSW Net Zero Plan and Building Sustainability Index (BASIX) requirements where they apply to existing buildings undergoing major works.

Climate Resilience Considerations

Separate from sustainability inclusions, the 2026 format requires explicit consideration of climate resilience. For Sydney buildings, this means:

• Increased rainfall intensity and drainage adequacy (particularly relevant for flat roofs, basement drainage, planter boxes)
• Temperature extremes and thermal performance of the building envelope
• Coastal salt spray exposure for buildings within 1 km of the harbour or ocean

Our team has worked on buildings in Pyrmont, Darling Point, and Vaucluse where salt attack has materially accelerated the deterioration of concrete facades and steel balustrades. A capital works plan for a coastal or harbour-facing building that does not factor in chloride exposure is underestimating replacement frequency and cost.

How to Commission a Compliant Capital Works Plan

The process for commissioning a plan under the 2026 format involves five steps.

1. Resolve at a general meeting to commission a new or updated capital works plan. Minute the resolution with reference to Section 80 SSMA.
2. Engage a qualified preparer. Seek at least two written proposals (and ensure the engagement itself complies with the two-quotes rule in Section 102 SSMA if the total cost of the planning engagement plus any associated condition assessment exceeds $30,000 - unlikely for a standalone plan, but possible if a full building condition survey is included).
3. Provide the preparer with: the current plan (if any), maintenance history for the past 5 years, known defects or pending works, copies of any recent defect reports, and access to inspect the building.
4. Review the draft plan for completeness against the 2026 requirements. The plan should show a separate line item for each major building element, not a single "maintenance" figure.
5. Adopt the plan at a general meeting by ordinary resolution. Minute the adoption and store the plan with the strata roll records.

The capital works fund levy must then be set at a level that funds the plan. An owners corporation that adopts a plan but sets levies below the plan's required contributions is creating the same problem the plan was designed to prevent.

What a Compliant Plan Costs

These figures are for the plan preparation alone. If the preparer needs to commission or review a building condition report as part of the process, that is a separate engagement. For the cost of associated building inspections, see our Building Defect Report guide.

Connecting the Plan to the Remedial Programme

A capital works plan is only useful if it drives action. The plan identifies the timing and cost of major works. The remedial programme executes them. The connection between the two requires:

• A scope of works that accurately reflects the plan's specifications
• Quotations obtained in compliance with Section 102 SSMA (two independent quotes for works over $30,000)
• A contractor selection process documented in committee minutes

For guidance on obtaining comparable, defensible quotes, see our article on the two-quotes rule and scope of works.

The broader obligation to carry out works identified in the plan rests with the owners corporation under Section 106 SSMA. A committee that adopts a capital works plan, collects levies, but then fails to execute the works is not protected by having a plan. The plan creates the framework; execution is the legal obligation. Read our plain-English guide to Section 106 for the legal position.

For context on what remedial works actually cost in Sydney today, the 2026 Sydney Building Remedial Cost Index provides current market rate data by element.

References:

• Strata Schemes Management Act 2015 (NSW)
• NSW Government - Strata Living
• Strata Community Australia (SCA)

The Bottom Line

A compliant 2026 capital works plan costs between $1,800 and $5,500. A special levy for a major building element that the plan failed to anticipate costs that amount per lot, not per building. The owners corporation's job is not to avoid spending money on a plan - it is to spend the right amount on the building, at the right time, without emergency funding events. The 2026 format gives schemes the structure to do that. Use it properly.