Question: Are there any legal limits on how much or how quickly strata levies can be increased, or is it purely up to strata management’s discretion?
Are there limitations and/or restrictions for both time and cost for strata levy increases, or are they purely at the discretion of strata management?
Answer: In NSW there’s no legislated cap on strata levy increases. Levies are decided by the owners corporation at a general meeting, not the strata manager.
In NSW, there is no legislated cap on how much strata levies can increase from one year to the next. However, levy increases must be based on the strata scheme’s legitimate financial requirements and approved by the owners corporation, not set unilaterally by the strata manager.
Who decides levy increases?
A common misconception is that the strata manager sets levies.
In reality:
- The owners corporation determines the budget and levies at a general meeting, usually the AGM.
- Owners vote on the proposed budget and contributions.
- The strata manager’s role is generally to prepare budgets, provide advice, and administer the scheme, but they cannot increase levies at their own discretion.
Is there a limit on the size of an increase?
No specific percentage limit exists under the Strata Schemes Management Act 2015 (the Act).
For example, if:
- insurance premiums rise significantly,
- major remedial works are required,
- the capital works fund has been underfunded,
- compliance or safety works become necessary,
then increases of 20%, 50%, 100% or more may be legally justified.
However, owners may question or challenge a levy if it appears:
- excessive,
- unreasonable,
- unsupported by the budget, or
- inconsistent with the scheme’s actual financial needs.
How much notice must be given?
Once levies are approved:
- Standard levy notices must generally provide at least 30 days’ notice before payment is due.
- For emergency repairs, the notice period can be reduced to 14 days.
Can levies be increased during the year?
Yes.
If unexpected expenses arise and the scheme does not have sufficient funds, the owners corporation may raise a special levy at a properly convened general meeting. The strata committee or strata manager cannot simply impose this on their own.
Practical “reasonableness” test
While the law does not set a percentage cap, NCAT would generally expect levy increases to be supported by:
- an approved budget,
- actual expenditure forecasts,
- the 10-year capital works fund plan,
- insurance increases,
- anticipated repairs and maintenance obligations.
This will become a more common occurrence as the legislation changes evolve to ensure owners are funding their buildings correctly in the future. This will reduce special levies, but regular quarterly levies will need to increase to ensure capital works funding is sufficient to meet future needs.
This post appears in the October 2026 edition of The NSW Strata Magazine.
Sean Bermingham The Strata Collective E: info@thestratacollective.com.au P: 02 9137 2320
