Frequently Asked Questions

The Fire Services Property Levy (FSPL)

How are our fire services funded?

When did we change to FSPL?

How do I know how much I am paying?

How is the FSPL calculated?

Why are there different rates for the MFB and CFA areas?

How do I pay for the FSPL?

Are there any concessions?

Is there stamp duty or GST on FSPL?

What contribution do the State Government and metropolitan councils make to the fire services under FSPL?

Do any additional charges apply when there is an incident?

What is the capital improved value (CIV)?

Where do I find my property’s CIV?

What if I disagree with my CIV?

What is an AVPCC?

What protection is there for households and small businesses during the transition?

If I sell my property, do I get a refund for the portion of the year that I no longer own the property?

Do businesses pay the levy?

I am a farmer with multiple land parcels: do I pay on each one?

Why is the levy charged on vacant land?

Is non-rateable land leviable?

What happens if I cannot pay FSPL?

Is there an FSPL on vehicles?

How are residential investment flats or short term holiday accommodation properties treated under the Fire Services Property Levy?

What happens if a supplementary valuation is undertaken?

How does the Fire Services Property Levy affect my insurance?

Does this mean I no longer need to insure my home and property?

Will my council rates increase as a result of the FSPL?

 

The Fire Services Property Levy (FSPL)

Prior to 1 July 2013, insurers added a Fire Services Levy charge onto insurance premiums to recover the cost of their contributions to the fire services – the Country Fire Authority (CFA) and Metropolitan Fire Brigade (MFB). This levy was often listed on home and contents insurance notices. In addition, GST and stamp duty were added on top, creating a ‘tax on a tax on a tax’.

The Victorian Bushfires Royal Commission found the insurance-based levy to be highly flawed, unfair and in need of reform. One of the major problems was that property owners who chose not to insure, under insure or self-insure made no (or inadequate) contribution to our fire services.

The Victorian Bushfires Royal Commission recommended replacing the insurance-based funding model with a property-based levy.

The Government adopted this recommendation and from 1 July 2013, the Fire Services Levy was removed from insurance premiums with property owners now contributing with council rates. This ensures that all Victorian property owners contribute a fair share to our fire services, not just those who adequately insure.

This means that any insurance policy taken out or renewed after 1 July 2013 should not include a Fire Services Levy.

If you believe your insurance company is charging you a fire services levy for policies starting or renewed after this date, you should contact the Fire Services Levy Monitor:

www.firelevymonitor.vic.gov.au
or call 1300 300 635.

How are our fire services funded?

The MFB and CFA are largely funded by the Fire Services Property Levy which is collected by councils, and the State Government.

Councils collect 87.5 per cent of MFB budget and 77.5 per cent of CFA budget from Victorian property owners.

The State Government contributes the remaining 12.5 per cent of the MFB budget and 22.5 per cent of the CFA budget.

Metropolitan councils used to make a statutory contribution to the fire services. However, the metropolitan councils are now treated like any other property owner (with some special treatment for recreational land).

When did we change to FSPL?

The FSPL commenced on 1 July 2013. Property owners pay their FSPL as part of their council rates notices.

The FSPL is collected in accordance with the Fire Services Property Levy Act 2012, which legislates that all Victorian property owners are liable for a financial contribution (via the FSPL included on their annual council rates notice charge) to the State’s fire services.

How do I know how much I am paying?

Collection of the levy is simple and transparent. Property owners receive notice of their FSPL on their council rates notices, including how the levy has been calculated.

How is the FSPL calculated?

FSPL is made up of two parts:

  • a fixed charge; and
  • a variable charge based on the property’s capital improved value.

For 2014-15, the fixed charge on residential property (including vacant residential land) is $102 and the fixed charge for commercial, industrial, primary production, public benefit and vacant property is $205.

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

The variable levy rates for 2014-15 are:

CFA Variable rates (cents per $1,000 of capital improved value)
Property Sector CFA
Residential 10.9
Commercial 88.0
Industrial 132.0
Primary production 24.6
Public benefit 10.9
Vacant (excluding vacant residential land) 10.9

MFB Variable rates (cents per $1,000 of capital improved value)
Property Sector MFB
Residential 6.5
Commercial 55.0
Industrial 85.9
Primary production 15.4
Public benefit 6.5
Vacant (excluding vacant residential land) 6.5

The levy is calculated using the following formula:

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

Why are there different rates for the MFB and CFA areas?

Separate levies remain in the MFB and CFA areas in recognition of the different costs associated with funding each service.

How do I pay for the FSPL?

Councils list the FSPL as a separate item on the rates notice for rateable properties. You are able to pay the FSPL in the same manner as your rates. This means that you can pay the FSPL in four instalments.

Are there any concessions?

There is a $50 concession for holders of pensioner concession cards and Department of Veterans’ Affairs gold cards (TPI) – Totally and Permanently Incapacitated and War Widows on their principal place of residence. Only one concession applies per property. This is administered in the same way as the rates concession.

Property owners who currently receive a council rates concession in respect of their principal place of residence automatically receive the FSPL concession.

For further information on Victorian concessions call the Concessions Information Line on 1800 658 521.

Is there stamp duty or GST on FSPL?

Stamp duty and GST are no longer charged on the levy, the Government has forgone this ‘tax-on-tax’ component.

What contribution do the State Government and metropolitan councils make to the fire services under FSPL?

The State Government continues to fund 12.5 per cent of the MFB budget and 22.5 per cent of the CFA budget.

The metropolitan council contribution has been abolished and local councils are now treated like any other property owner (with some special treatment for recreational land).

Do any additional charges apply when there is an incident?

In certain circumstances, fire services may charge for specific incidents in accordance with legislation. This mainly relates to false alarms and hazardous material incidents not involving fires.

What is the capital improved value (CIV)?

CIV is the value of your land with improvements as determined by your council. A revaluation of land is completed by each of Victoria’s 79 municipalities every two years in accordance with guidelines specified by the Valuer-General of Victoria.

Where do I find my property’s CIV?

Your CIV is located on your council rates notice.

What if I disagree with my CIV?

If you disagree with the value of your property as listed on your rates notice, please contact your council for more information.

What is an AVPCC?

An AVPCC is an Australian Valuation Property Classification Code. An AVPCC is allocated to each property by the council’s valuer according to the use of the land – e.g. house, shop, cattle grazing.

The AVPCC is used to determine the land use classification.

What protection is there for households and small businesses during the transition?

The Victorian Government appointed Professor Allan Fels as the Fire Services Levy Monitor to ensure consumers are protected during the transition to the new property-based levy.

The Office of the Monitor provides advice to consumers, receives and investigates complaints regarding the insurance-based levy and monitors the insurance industry to make certain that insurers genuinely pass on savings to policyholders.

The Fire Services Levy Monitor has substantial powers to protect consumers as Victoria transitions to the new fire services funding arrangements.

For more information about the Monitor or to lodge a complaint, please visit www.firelevymonitor.vic.gov.au or call 1300 300 635.

If I sell my property, do I get a refund for the portion of the year that I no longer own the property?

No, similar to council rates there may be adjustments made at the time of settlement. This is a matter between the vendors and the purchasers.

Do businesses pay the levy?

All property owners, including businesses and households, now contribute to the levy when they pay their council rates.

I am a farmer with multiple land parcels: do I pay on each one?

Primary production properties consisting of multiple land parcels but valued as a single property for rates purposes are treated as a single property for the purposes of the FSPL. This means they only pay the fixed component of the levy once.

A person may also apply for an exemption from paying more than one fixed charge for a farm property that is a single farm enterprise (SFE).

Please contact your council for the SFE exemption application form.

For more information about the SFE exemption, please call the State Revenue Office on 13 21 61.

Why is the levy charged on vacant land?

Land can present a fire risk even where there are no buildings or structures on that land. It is therefore fair that owners of vacant land make a contribution to the fire services for the risk posed by that land.

Is non-rateable land leviable?

Yes, most non-rateable land is leviable.

What happens if I cannot pay FSPL?

Councils are able to waive or defer the whole or part of FSPL on the grounds of financial hardship, as they do with rates. However, a council can waive or defer FSPL payment only if it also waives or defers payment of rates for that specific property.

If a property owner does not pay their FSPL, councils are expected to take steps to recover outstanding amounts, which may include charging interest or initiating court action.

Is there an FSPL on vehicles?

The FSPL does not apply to personal property (contents) or motor vehicles.

How are residential investment flats or short term holiday accommodation properties treated under the Fire Services Property Levy?

In the first year of the Fire Services Property Levy, almost all residential properties, whether owner occupied or rented out to tenants, were allocated to the residential land use classification.

However, properties known as ‘residential investment flats’ (with an Australian Valuation Property Classification (AVPCC) of 131), were allocated to the commercial land use classification for 2013-14. Such properties include blocks containing multiple flats on one title, where a landlord runs the complex as a business.

Short term holiday accommodation (with an AVPCC of 133) was also allocated to the commercial land use classification for 2013-14. Such properties include commercially based, short-term, “star rated” business and tourist accommodation.

In the case of residential investment flats and short term holiday accommodation, the Government has amended the Fire Services Property Levy Act 2012 to reallocate these properties from the commercial to the residential land use classification, with effect from 2014-15.

What happens if a supplementary valuation is undertaken?

When a supplementary valuation is undertaken the council issues a supplementary rates notice with the adjusted levy amount due as a result of a change in the CIV or AVPCC. Any payments already made at the time of the supplementary valuation will be credited against the payment of the new levy amounts.

How does the Fire Services Property Levy affect my insurance?

The Fire Services Levy (FSL) is no longer collected as part of your insurance policy. Since July 1 2013, this levy has been collected by your local council with property rates.

Does this mean I no longer need to insure my home and property?

No, the FSPL is not insurance and does not negate the need to have insurance. It simply shifts the collection of fire services funding from insurance policies to rates notices. This system ensures all Victorian properties contribute to the funding of fire services provided by the MFB and CFA. It does not cover property damage. Property owners should still renew or take out insurance appropriate to their circumstances to enable them to recover from adverse events.

Will my council rates increase as a result of the FSPL?

Under the insurance-based levy, councils within the metropolitan area serviced by the MFB were required to contribute 12.5 per cent of the MFB's approved annual budget. From 1 July 2013, this statutory contribution ceased, and councils are now required to pay the FSPL on council owned properties.

The abolition of both the insurance-based levy and the direct statutory contribution of 12.5 per cent to the MFB by councils serviced by this fire service means that there should be no increase in underlying council rates as a result of the transition to the new levy.

Fire Fighters