Client Update: Victoria's new fire services levy
31 August 2012
In brief: The Victorian Government this week announced its intention to introduce a new Fire Services Property Levy, to replace the existing fire services levy imposed by insurance companies. The new property-based levy will be collected by local councils. Partner Chris Schulz (view CV) and Law Graduate Tim Farhall examine the proposed changes.
- All property owners will become liable for the Fire Services Property Levy from 1 July 2013.
- The current fire services levy imposed on insurance premiums will be abolished.
- A new Fire Services Levy Monitor will be established to oversee the new levy.
- We will provide a further update on the detail of the proposed Bill next week.
Currently, the majority of funding for the Metropolitan Fire Brigade (the MFB) and Country Fire Authority (the CFA) is provided by a fire services levy. This levy is imposed by insurance companies, and is calculated by reference to insurance premiums. The Bushfires Royal Commission recommended that this levy be abolished, and replaced with a property-based charge with concessions for people on low incomes. On 28 August 2012, the Victorian Government introduced the Fire Services Property Level Bill 2012 which is intended to implement the Commission's recommendation.
The new levy will be comprise two components: a fixed fee, plus a variable rate. The fixed fee will be $100 for residential properties and $200 for non-residential properties. The variable rate will be a percentage of the capital improved value of the property. There will be different rates set in areas served by the MFB and the CFA. The rate will vary between types of property, such as residential, industrial, commercial and primary production. The Government's intention is that the different sectors will bear a similar proportion of the overall burden as they do at present. The rate will be set in next year's Budget.
The new levy will commence on 1 July 2013. It will be collected by local councils through rate notices, overseen by the State Revenue Office.
The Government has indicated that the Bill will also introduce a number of related changes:
- GST and stamp duty will not be payable on the new levy, as they are on the current levy;
- a Fire Services Levy Monitor will be established to scrutinise the insurance industry during and after the transition period;
- new consumer protection laws will introduce new offences for price exploitation, false representation, and misleading conduct; and
- concessions will be available for pensioners and veterans card holders.
All land owners will be affected by the new levy. We are currently analysing the provisions of the Bill, and will provide a further update next week.
- Chris SchulzPartner,
Ph: +61 3 9613 8772
- Paul LalichPartner,
Ph: +61 2 9230 4026
- Jim ParkerPartner,
Ph: +61 2 9230 4362
- Bill McCrediePartner,
Ph: +61 7 3334 3049