Why Insurance Tax Reform Is Back on the Strata Agenda

While much of the public discussion focuses on household insurance, the same cost pressure can be felt sharply in apartment buildings, townhouse complexes and mixed-use schemes. A strata premium is influenced by many factors, including location, claims history, construction type, maintenance standards, exposure to flood or cyclone, and the cost of reinstating shared property. Taxes and statutory charges can sit on top of these fundamentals, making affordability harder to manage for committees already trying to balance budgets.

This is an extension of a broader issue we have covered previously: rebuild cost pressure. Even if governments reduce taxes over time, schemes still need to ensure the insured value reflects what it would actually cost to demolish, design, approve and rebuild after a major loss. A cheaper premium is not a win if it comes with underinsurance, unsuitable exclusions or excess settings that the owners corporation cannot realistically absorb.

For committees preparing for renewal, the practical takeaway is to separate the premium into its moving parts. Ask what has changed in the building’s risk profile, what has changed in the insurer’s appetite, what portion relates to statutory charges, and whether the sums insured remain defensible. Where there have been major works, rising construction costs, new equipment, façade issues or repeated water damage claims, the renewal conversation should start well before expiry.

It may also be useful to estimate a practical strata building sum insured as a planning step before seeking updated terms. This does not replace a professional valuation or personal advice, but it can help committees identify obvious gaps and ask better questions.

The insurance tax debate is ultimately about affordability, but affordability should not be confused with simply paying less. For strata schemes, the stronger position is to combine transparent premium review, accurate building data, active maintenance and clear communication with owners. That gives the committee a better basis for explaining renewal outcomes and for deciding whether alternative cover options, excess structures or risk improvements should be explored.