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What's the difference between strata and Torrens title properties?

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The Smart Booster Home Loan is our low rate home loan which allows you to boost your savings, build your equity and own your own home, sooner.

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When searching for a property you may have seen the terms “Strata” or “Torrens title.” It’s important to understand the difference between these two terms.

Strata properties, are properties that are adjoining - such as apartments or townhouses. These properties share physical aspects such as roofs, or driveways, and common areas such as pools, elevators etc.

These aspects are managed collectively by all sharing owners. This means the maintenance and upkeep of the common areas are shared financially, usually through quarterly or annual payments made into a shared fund.

If you are looking to purchase a strata property, you should ensure you read and understand the owners corporation and examine how funds are managed and what the costs are for you as a potential owner.

A Torrens title on the other hand means you are the sole owner of the property.

This system ensures you own the land, and the building on the land and therefore can make any changes you wish pending council regulations.

Pros of strata title properties

Outsourcing of property maintenance

The main advantage of strata title properties is that maintenance, upkeep and repairs are outsourced and not your responsibility to organise.

For example, an apartment complex may have a pool and a gym, that are cleaned and maintained through the body corporate. You would be financially contributing to this through strata fees, but do not have to organise the upkeep yourself.

Affordability

Strata properties usually are cheaper than non strata properties. House and land usually will be the most expensive type of property to purchase, meaning strata properties such as apartments or townhouses can be a more affordable alternative.

Cons of strata title properties

Changes to property have to be approved

Due to the shared nature of strata properties, renovations, upgrades or alterations are subject to approval of the body corporate.

This is the case for landscaping like changing the garden, fences, driveway etc. and for common areas like a pool or yard.

Strata fees can be high

A major disadvantage of strata properties is the ongoing and potential increase in costs. Complexes with elevators, pools or gyms tend to come with higher fees due to the cost of upkeep on these amenities.

You may pay for things you don’t use

Strata fees are divided amongst the owners of the properties in the complex. This is regardless of who uses the shared facilities. That means you could potentially be paying for pool cleaning, and maintenance, regardless of if you use the pool or not.

Strict rules around pets and other additions

Living in a strata property means you will have to abide by the strict rules and regulations of the complex. This often means restrictions on pets, noise after certain hours, and other facility use like BBQ’s.

Pros of Torrens title properties

Sole ownership

Owning a Torrens title property means you own the building and land. That comes with the benefit of freedom to renovate, rebuild, or add features like a deck, pool, bedroom or bathroom to the existing structure.

Repairs

If the property needs repairs or maintenance, it is up to you when and how it is done. For example, you may be able to fix something yourself, or wait until you can afford it before acting on it. In a strata property, repairs and maintenance will occur regardless of your financial situation and without you being able to decide who does it.

Pets

There are no restrictions on adding a fur baby to your home when you are the sole owner.

Privacy

Torrens title properties usually offer greater privacy and space from neighbors than strata title properties.

Cons of Torrens title properties

Financially responsible

When you are the sole owner of a property, you are also financially responsible for all repairs or maintenance. If something breaks, or needs repairs, like internal plumbing or exterior roofing, the cost is up to you.

Council regulations can still impact renovations

Even though you are the sole owner of a property, in most areas in Australia, there are council rules and regulations that prevent building on land.

These can be zoning rules about how far onto the front yard you can extend a house, height restrictions on building up, or even roots and pipes under the ground that may not be able to be removed.

If you’re in the market for a new property, loans.com.au can assist with a home loan for a strata title property or a Torrens title property.

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About the article

As Australia's leading online lender, loans.com.au has been helping people into their dream homes and cars for more than 10 years. Our content is written and reviewed by experienced financial experts. The information we provide is general in nature and does not take into account your personal objectives or needs. If you'd like to chat to one of our lending specialists about a home or car loan, contact us on Live Chat or by calling 13 10 90.

Tags: strata