23/01/2006 NEWS: CFA volunteers fighting a fire spot over near Walhalla.

Adroit broker Sean Mackay looks at the reformed fire service levy system and why it’s fairer for all Victorians.

From July 1, 2014,  the fire service levy charged on property insurance within Victoria was removed, replaced by a property-based levy that is collected with council rates.

The old fire service levy which was charged on insurance funded about 70% of the cost of running Victoria’s fire services – meaning that for years, those who elected to adequately insure their property were unfairly penalised through the charging of a fire levy while others who underinsured or chose not to insure still used the services.

As a result of these changes, all property owners contribute to the funding of Victoria’s fire services, not just those with adequate insurance. This reformed fire levy is fairer because:

• Every Victorian property owner contributes through their council rates, or in the case of non-rateable properties, through a separate notice;

• The levy is calculated based on the capital improved value of a property;

• GST and stamp duty are longer charged on the levy;

• New concessions are available for holders of an eligible Pensioner Concession Card or Department of Veterans Affairs Gold Card (TPI);

• The levy rate varies for residential, industrial, commercial and primary production (farm) properties;

• Separate levies are charged in the Metropolitan Fire Brigade and Country Fire Authority areas in recognition of the different costs associated with funding each service;

• The Victorian government will continue to make a direct contribution to fund the fire services.

To protect consumers during the transition, and make sure insurers genuinely pass on savings, the fire services levy monitor has been established.

Consumers have traditionally gone on a roller coaster ride as the levy has increased continuously reaching as high as 95 per cent on some products and now back down to 30 per cent (average). Given the predicted reduction in insurance premiums, it’s an opportune time to review insurance policies and in particular, the assets’ sums insured to ensure their adequacy.

In recent times, many families and businesses have discovered that their insurance covers were well below the cost of replacement. With unprecedented high temperatures and storm activity throughout the country, we strongly suggest that home owners and businesses review their level of cover. Get in touch today


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