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Fire Services Property Levy

From 1 July 2013, the Fire Services Levy has been removed from insurance premiums and replaced by the property based Fire Services Property Levy (FSPL).  Collection of the levy will be managed by local Councils and collected with council rates, under the direction of the State Government.  This means all property owners will contribute a fair share to our fire services, not just those with adequate insurance.

How are Victoria's fire services funded?

Why is it being changed?

How much will I contribute?

Will there be any concessions?

How else is it fairer?

How will I be protected during the transition?

Where do the funds go?

 

How were Victoria's fire services funded?

Prior to 1 July 2013, the Metropolitan Fire Brigade and Country Fire Authority were funded by a Fire Services Levy that insurance companies applied to building and contents insurance premiums.  The amount that policy holders were charged was at the discretion of the insurance companies.

Why is it being changed?

Under the old system, everyone received assistance from the State's fire services, even though not everyone helped fund them.  Also, many people paid more than their fair share.  The Victorian Bushfires Royal Commission found that the insurance-based levy was unfair and lacked transparency.  It recommended replacing it with a property-based levy to make sure all Victorian property owners contribute a fair share.

How much will I contribute?

The Fire Services Property Levy is made up of two parts:

  • a fixed charge
  • a variable charge based on the property's capital improved value (CIV).

Using the 2013-2014 levy rates, the levy is calculated using the following formula:

Levy = fixed charge + (Capital Improved Value x levy rate) - concession (if any)

e.g.  for a residential property with a CIV of $466,000

$100 + ($466,000 x 0.000115) = $153.59       less $50 concession if applicable = $103.59

Calculate the FSPL for me

Fixed charge

For 2013-14, the fixed charge is $100 for residential properties (including vacant residential land) and $200 for non-residential properties (including commercial, industrial, primary production, public benefit and vacant property).

The fixed charge will be indexed annually in accordance with movement in the consumer price index.

Variable charge

The variable levy rates for 2013-2014 for the Loddon Shire (CFA variable rates, cents per $1,000 of CIV) are as shown in the table below.

Property Sector
CFA rates
 Residential  11.5
 Commercial  109.2
 Industrial  170.9
 Primary Production
 31.2
 Public Benefit
 11.5
 Vacant (excluding vacant residential land)
 11.5

Will there be any concessions?

Yes, there will be a new $50 concession for eligible pensioners and veterans.  Also, farmers with multiple properties that operate as a single enterprise can lodge an exemption form to pay a single fixed charge.

Rates concession application

Single farm enterprise exemption application form

How else is it fairer?

As part of the reforms, the Victorian Government has removed the unfair "tax on a tax" that saw GST and stamp duty charged on top of the old levy.  Together with the new concessions, this will save households and businesses approximately $100 million each year.

How will I be protected during the transition?

The Fire Services Levy Monitor has been established to oversee the change from an insurance-based levy and to make sure that insurers genuinely pass on savings to consumers.  If you have a concern about the removal of the insurance-based levy, contact the Fire Services Levy Monitor (or 1300 300 635). 

Paying the property-based levy does not remove the need to have adequate home and contents insurance.

Where do the funds go?

All funds collected by councils will go to supporting Victoria's fire services.

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