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For many property owners, body corporate levies are simply part of owning a unit or townhouse.
While no one loves paying more in contributions, levy increases are often a sign that your building is being well cared for and properly planned for the future. Understanding what drives these changes can help owners feel confident that their contributions are protecting their property’s value and keeping the scheme running smoothly.
This article looks at factors that influence body corporate levy increases.
1. Rising Insurance Premiums
Strata insurance premiums in Queensland have risen sharply in recent years. Factors such as higher building replacement values, inflation, rising construction costs, and more frequent severe weather events all contribute to these increases. For some schemes, a history of claims or unresolved insurance matters can also result in higher premiums, as insurers assess each building’s overall risk.
While higher premiums can add pressure to body corporate budgets, they play a crucial role in ensuring the building remains adequately insured and protected.
Further reading: Why Strata Insurance Premiums are Rising
2. Maintenance History and Ongoing Upkeep
Regular maintenance is essential to keep a building in great condition and avoid unexpected repair costs. As buildings age, they naturally require more care and periodic upgrades to maintain their value and safety standards.
Sometimes, levies may increase incrementally to ensure there are enough funds to cover upcoming projects or to stay ahead of wear and tear, helping avoid special levies or more severe increases in the future.
Further reading: What are special levies?
3. Sinking Fund Health
A well-managed sinking fund helps a body corporate cover major capital works – like repainting, driveway resurfacing, or replacing common property, as the costs arise, without needing to raise a large special levy or take out a loan. To plan for this, a sinking fund forecast is prepared, usually by an independent quantity surveyor, who assesses all building elements and predicts when upgrades, replacements and capital works are required over short, medium and long term life span of the buildings, assets and amenities.
This forecast is typically reviewed every five years, but sometimes sooner if significant projects run over budget or unexpected costs arise. If the forecast shows that the current savings are not enough to meet future expenses, levies may need to increase to keep the sinking fund on track. This ensures that funds are available when needed, avoiding any surprises and protecting the long-term condition and value of the property.
Further reading: Reviewing the sinking fund
4. Frequency and Level of Services
Every building is unique in the services it provides. Regular gardening, cleaning, pool servicing, security, and other maintenance all come at a cost. If your building has a higher frequency of services or has recently voted to increase services, greater costs will be incurred, and this will be reflected in higher levies in most cases. Smaller buildings can feel these increases even more with fewer owners to share the expenses when costs increase.
5. Energy and Utility Costs
The cost of powering and servicing common areas like lifts, pools, gyms, and shared gardens, adds to the levy total. Rising utility prices or greater usage can push costs up. Some buildings invest in sustainability measures, like solar panels or changes from standard lighting to more efficient LED and/or timer-based systems. Initial investment in energy efficient systems may increase costs initially but can deliver savings in the longer term.
6. Rising Costs of Goods and Services
Much like household expenses, a building’s running costs rarely stay the same. Inflation, supply chain pressures and rising labour costs mean that essential goods and services all become more expensive over time. A body corporate must adjust its levies to keep pace with these increases to maintain the building’s condition and comply with its obligations.
7. Compliance and Safety Requirements
New regulations – fire safety standards, cladding rectification, lift safety upgrades or energy efficiency requirements may mean additional inspections, certifications or works that must be funded by the body corporate.
In Summary
Most body corporate levies generally increase over time as maintenance and capital works arises. Adequate budgeting and an understanding of the cost of running your body corporate now and in the long run can ensure that the increases in time are gradual rather than reactive and sometimes costly increases.
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