Changes Affecting Strata Levies From 1 July 2017


Changes to the Terrorism Insurance Act 2003 (Cth) (the Act) become effective from 1 July 2017, and some mixed-use commercial and residential strata buildings will see new terrorism levies of up to 16%, plus statutory charges, on affected policies.


These changes broaden the definition of eligible property to include buildings with at least 20% of floor space being used for commercial purposes, or schemes which have a single building sum insured of at least $50 million (whether used for commercial or other purposes).

In brief, the two key changes in terms of classification of strata buildings from the Australian Reinsurance Pool Corporation (ARPC) are:

1. Commercial Strata

Commercial buildings now defined as greater than or equal to 20% commercial floor space ratio, irrespective of tenancy. The result is that all Strata Community Insurance Commercial Strata policies will attract the ARPC terrorism levy.

2. Residential Strata

  • ARPC terrorism levy to be charged on residential schemes where one or more single buildings has a sum insured equal to or greater than $50 million.
  • Where ARPC coverage under the Act does not apply, for schemes consisting of multiple residential buildings having a combined sum insured greater than $50 million, these schemes remain protected under Strata Community Insurance’s specially negotiated terrorism cover up to $100 million.
  • Schemes consisting of single or multiple residential buildings with a combined sum insured of less than $50 million also remain protected under our specially negotiated terrorism cover.

    Tiered approach

    Location of the scheme will be a significant component with this upcoming change, given application of a tiered levy model under which physical location is used to determine the rate of levy applicable:

  • Classification A 16% levy - capital cities with a population over 1 million.
  • Classification B 5.3 % levy - urban areas with a population over 100,000.
  • Classification C 2.6% levy - rural areas plus all other areas not captured by A and B.

  • Strata Community Insurance terrorism cover

    For schemes that fall outside of the criteria for ARPC cover under the Act, Strata Community Insurance’s terrorism cover will continue to apply – up to $100 million.

    For more information, please contact your Owners Corporation Manager at Melcorp Strata.

    * Ref: Strata Community Insurance.


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    Gino Marinaro

    Gino Marinaro
    Owners Corporation Manager

    477 Swanston Street
    Melbourne VIC 3000
    P: +61 3 8638 1822

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