The rates for the new Fire and Emergency Services Levy that will be added to council rate notices from 2017-18 onwards are now available. As a result, all home owners in North Arm Cove can now calculate how much they will be charged when the levy comes into effect on July 1.
Under the new system, which is similar to that which applies in all other mainland states, the annual levy will replace the Emergency Services Levy that has historically been added to home insurance policies. While the new levy will appear on local council rate notices it will not go to councils but will instead be passed on to the NSW Government.
The rate of the levy for homeowners has been set at a fixed base amount of $100 plus $21.90 for every $100,000 of the unimproved capital value of your property, as determined by the latest valuation by the NSW Valuer General. For example, a homeowner with an unimproved capital value of $350,000 would pay a levy of $100 plus 3.5 x $21.90, for a total of $176.65.
To check the levy that will apply to your home click on this link http://fesl.nsw.gov.au/ and then use the calculator at the bottom of the web page.
As with most changes there are both winners and losers out of the new system. The winners will be those whose Emergency Services Levy on their home insurance policies is higher than the new levy.
The state government has estimated that the average homeowner with full home and contents insurance should be almost $50 a year better off due to the abolition of the existing Emergency Services Levy. On average this should cut the cost of insurance by $233 a year. The government has set up an Insurance Monitor charged with ensuring these cuts are made.
Pensioners and veterans are also at least potential winners as they will get a $50 discount on the levy. This discount will rise in line with inflation
The main losers are those who own vacant land. For while they will be eligible for a 50 per cent discount they will have to pay the levy even though they have no house on their land, and so no valuable asset to protect or repair in an emergency. What’s more, in order to get the discount such landowners need to apply to the local council to have their property classified as vacant land.
Those who own non-urban blocks in North Arm Cove or elsewhere will certainly be losers as they will be hit by at least the base rate of $100 even though the land’s value is very low and they can’t build on it.
While not relevant for North Arm Cove residents, other than those who may own a unit as a second home or investment, it is possible owners of home units may also be worse off since their building insurance is paid for by their strata levies. It is possible some could end up paying the levy without getting the benefit of their strata levies being reduced.
Finally, anyone who has decided not to insure their property or its contents will also be worse off since they will be hit by the new levy without getting a saving from no longer having to pay the emergency services levy included in insurance policies. Since they don’t have insurance they have never paid the levy.
This is not a group the state government will sympathise with since the new levy system is partly designed to help address the fact NSW reportedly has the highest level of uninsured and underinsured properties of any Australian state. By cutting the cost of it is hoped more home owners will take out insurance while others will fully rather than just partially insure.
