Why Strata Levies Are Rising in 2026

If your strata levies went up this quarter, you are not alone. We have been hearing the same question from owners across Sydney: is a 20 to 30 percent increase normal?

The short answer is that it depends on the building. But the pattern we are seeing across a lot of schemes right now has three drivers happening at the same time, and that is unusual.

What Is Driving the Increases

1. Insurance premiums

Building insurance is one of the largest single costs in most strata budgets. Premiums have risen sharply over the past two years, particularly for buildings in flood-prone areas, coastal zones, and older buildings with unresolved cladding. The national average increase was modest at around 3 percent, but individual buildings can see much larger jumps depending on location, claims history, and building type. Some schemes in flood-prone or coastal areas have seen increases well above 20 percent at renewal. That cost flows directly into admin fund levies.

2. The new capital works plan standard form

From 1 April 2026, NSW committees preparing or updating their 10-year capital works plan must use a new prescribed standard form. The form requires more granular cost categories than previous practices. Separately, since 1 July 2025, committees must also consider sustainability infrastructure costs in their annual capital works fund estimates, covering items like EV charging, solar panels, and energy efficiency upgrades.

When committees go through the exercise properly with the new form, many are finding their plan needs higher contributions than before. Buildings that have been setting capital works levies just high enough to look comfortable on paper are now having to confront the real cost of maintaining the building over the next decade.

This is not a bad thing. It means the numbers are getting more honest. But it means levies are going up to match reality.

3. Deferred maintenance catching up

Buildings that postponed non-urgent maintenance during 2020 to 2023 are now dealing with the backlog. Lift refurbishments, waterproofing, facade repairs, fire safety upgrades. Contractor rates have risen 15 to 25 percent since 2022, so the same work costs more than it would have three years ago.

The combination of insurance, honest planning, and deferred work all landing at once is why this quarter feels different.

Do Levies Ever Go Down?

Technically yes. In practice, it is rare and usually temporary.

The most common scenario is when a scheme has deliberately over-funded its capital works account ahead of a major project. Once the project is complete and the fund is healthy, a committee might reduce the capital works contribution for a year or two. Some smaller buildings also reduce admin fund levies after a period without cost increases.

But the structural forces pushing levies upward, insurance, energy, labour costs, building age, are persistent. A levy that stays flat for several years is, in real terms, going backwards.

What to Look For in Your Building

If your levies increased significantly this quarter, three things are worth checking:

The capital works fund balance. Is the fund healthy relative to the building's age and upcoming works? A 15-year-old building with a low capital works balance is a warning sign.

The 10-year capital works plan. Has it been updated using the new standard form? Does it include realistic cost estimates, or do the numbers look artificially low?

The insurance renewal. Ask your strata manager for the insurance summary at the next AGM. If the premium jumped, that alone can explain a large chunk of the levy increase.

If the increase still does not make sense after reviewing these, it is reasonable to ask for the itemised budget breakdown. You are entitled to it.

The Bigger Picture

From the data we see across a lot of buildings, the schemes that handle this best are the ones that increase levies gradually each year rather than keeping them flat and then hitting owners with a large correction. Smooth, predictable increases are easier to budget for than sudden jumps.

The buildings with the worst outcomes tend to be the ones that kept levies artificially low to avoid complaints, deferred maintenance, and then faced a special levy when something failed. That pattern costs more in the long run.

This is not financial advice. We are sharing what shows up in the data across the buildings we look at. If you need advice specific to your building, your strata manager and a qualified quantity surveyor are the right people to talk to.