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Changes to the Victorian Government’s Fire Services Levy
As you all may know, from 1 July next Monday, the Victorian Government is replacing the current insurance-based fire services levy with a property-based levy collected with council rates.
As CFA members you may be curious to know what these changes mean for you, and the communities we serve. Please see below an overview of the main changes to help keep you, your families, friends and communities informed.
The current Fire Services Levy
Victoria's fire services are largely funded by contributions made by the insurance industry and the State Government.
The insurance industry currently passes the cost of its contribution on to Victorian policy holders through a fire services levy on insurance premiums. These costs are recovered at the discretion of the insurance companies.
One of the flaws of the insurance-based levy is that property owners who choose not to insure, under insure or self-insure make no (or an inadequate) contribution to our fire services.
What is changing?
The Victorian Bushfires Royal Commission recommended the State replace the inequitable Fire Services Levy with a Property Based Levy.
From 1 July 2013, the Victorian Government will introduce this new property-based levy and will replace the current arrangements of raising funds through insurance companies.
The Government's intention for this new property-based fire levy is to ensure that all property owners contribute to funding Victoria's fire services, not just those who take out adequate insurance.
It will be calculated based on the capital improved value of a property and will be collected by councils with rates, on behalf of the Government.
View the Victorian Government's television commercial which explains the change.
How will it work?
Under the new model:
- councils will collect the levy with rates on behalf of the State Government
- GST and stamp duty will no longer be charged on the levy
- the levy will consist of a fixed component plus a variable component calculated as a percentage of capital improved property values
- the fixed component will be $100 for residential properties and $200 for non-residential properties
- the variable cost will be calculated based on the capital improved value of a property
- there will be a $50 concession for eligible pensioners and veterans
- the levy rate will vary for different property types such as residential, industrial, commercial and primary production (farms)
- Government will charge separate levies in the CFA and MFB areas in accordance with the different costs associated with funding each service.
Why will people pay a different levy rate depending on where they live?
Government may determine different levy rates for residents within and outside the metropolitan fire district. Property owners located within the metropolitan fire district will contribute to the funding of the Metropolitan Fire Brigade and property owners located outside the metropolitan fire district will contribute to the funding of the Country Fire Authority.
More information on the Victorian Government's Fire Services Property Levy including details on concession availability.
To calculate the likely charge you will receive for your property, and find out if your property is within the metropolitan fire district boundary.
A Fire Service Levy Monitor has also been established by the Government to oversee the transition to the new property-based levy and ensure that insurers genuinely pass on the abolition to their customers. If you need advice about the removal of the fire services levy from your insurance premium.
Frequently Asked Questions prepared by the Monitor.
CFA News article - New Fire Services Levy.