Why have my strata fees gone up?

Strata fees usually go up because owners approved a higher budget. Common drivers are insurance and contractor increases, utilities, planned maintenance, stronger capital or reserve funding, urgent repairs, defects, compliance work, legal costs, or a separate special levy. A sharp rise can also be a catch-up after years of low levies.

Fees rise because the scheme approved a higher budget — not because the manager independently changed a price. The useful question is which budget lines changed, why, and whether the decision was properly approved.

What this means in plain English

Each year the owners corporation, body corporate or strata company estimates what it must spend on the building and what it should reserve for future work. If those approved amounts increase, each lot's contribution normally increases according to the allocation rule for that scheme. The manager may prepare the draft figures, obtain quotations and issue the levy notices, but the budget and contributions must be authorised through the owners' decision-making process.

An increase is not automatically evidence of poor management. It may reflect a realistic insurance renewal, overdue maintenance or better preparation for a lift replacement, roof work or repainting. Equally, owners should not accept a large rise without explanation.

Where the increase may appear

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Annual increase versus special levy

A higher ordinary levy generally funds the next financial year's recurring expenses and reserves. A special levy is an additional contribution for a particular shortfall or expense. It may be billed as one amount or in instalments and can sit on top of the new ordinary levy. Confirm which type appears on the notice before comparing years.

Measure the change consistently: percentage increase = (new annual amount − old annual amount) ÷ old annual amount × 100. Annualise quarterly amounts, and keep ordinary levies, special levies, arrears and owner-specific charges in separate columns.

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The most common reasons strata fees increase

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Does an increase have to match inflation?

No. A scheme budget is built from the building's actual expected costs, not a national inflation figure. A lift overhaul, insurance renewal, defect repair or reserve-fund correction can push the increase well above general inflation. The supporting documents should still explain the difference.

A higher reserve contribution can be protective

Increasing the capital works, sinking, maintenance or reserve contribution may reduce the risk of a much larger special levy later. The key question is whether the contribution matches a credible forecast and whether planned work, fund balances and timing are transparent.

A low levy is not always a healthy levy. A simple building may genuinely cost less to operate, but levies can also look low because maintenance has been deferred, insurance is under-budgeted or the reserve fund is not keeping pace with future work.

Why a new building may see an early jump

Initial budgets can be based on estimates made before the scheme has a full year of real invoices, service contracts, defects, utilities and insurance experience. Once actual costs become clearer, owners may approve a catch-up budget. Compare the first-year assumptions with actual expenditure and the developer handover records.

How fee increases are approved across Australia

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Worked example: tracing a 33.3% increase

Assume a scheme's annual budget rises from A$180,000 to A$240,000 — the operating fund up A$25,000 and the future-works fund up A$35,000.

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The scheme-wide increase is (A$240,000 − A$180,000) ÷ A$180,000 × 100 = 33.3%. If a lot holds 10 of 1,000 applicable entitlement points and the allocation basis has not changed, its ordinary annual levy rises from A$1,800 to A$2,400 — an extra A$600 a year, or A$150 per quarter.

What if only my lot increased sharply?

If the scheme budget rose 10% but your annual account rose 30%, check for a special levy, changed instalment timing, arrears, interest, utilities, owner-specific costs or a lawful change in allocation. Also verify the lot entitlement, lot liability or contribution schedule used.

Documents to request

• Approved budget for the new period, with prior-year comparatives.
• Actual-versus-budget report showing where last year's spending exceeded or undershot the estimate.
• Financial statements — fund balances, arrears, cash flow, loans and major expenditure.
• Insurance renewal — premium, insured value, excesses, claims and broker recommendation.
• Long-term works plan — project dates, updated estimates and the required reserve contribution.
• Contracts and quotations — scope, term, indexation, related-party disclosure and alternatives.
• Meeting papers — the proposed budget, the motion, the voting result and the stated reasons.

The increases across the budget lines should reconcile to the total approved increase. Your lot's percentage change should broadly follow that result unless the allocation basis, special levies, instalment timing or owner-specific items changed.

Signs the increase is well supported — or needs more scrutiny

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What owners can do

• Read the AGM papers before voting and ask for line-by-line reasons.
• Request competing quotations for large or renewed contracts.
• Ask for the insurance renewal and the capital works or maintenance forecast behind any reserve increase.
• Nominate for the committee if you want closer oversight of procurement and forecasting.
• Use the state or territory dispute pathway if the budget or approval process was not properly followed.

Key takeaways

• Ordinary fees rise mainly when owners approve a higher budget for insurance, maintenance, utilities or future works.
• A reserve-fund increase can be prudent when it follows a credible forecast.
• The manager may prepare the figures, but the amount and allocation must follow the lawful owner approval process.
• A special levy sits on top of the ordinary levy — compare like with like before measuring the increase.
• There is no national percentage cap; the test is whether the budget and approval process support it.

Related questions

Can the strata manager increase our levies on their own?

No. A manager may prepare recommendations and issue notices under authority, but contributions must be set through the scheme's lawful decision-making process.

What should I do if I cannot afford the increase?

Contact the scheme or manager promptly and ask about payment or hardship options. Do not ignore the notice, because interest and recovery action may follow.

Is a big reserve-fund increase a bad sign?

Not necessarily. It is often prudent if it follows a credible long-term forecast with dated projects. It deserves scrutiny when there is no forecast, no project schedule and no explanation of fund balances.

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