From 1 July 2017, the Government will abolish the current insurance-based Emergency Services Levy and replace it with the Fire and Emergency Services Levy (FESL) paid by property owners alongside council rates.
The reform will be a fairer way of raising the money that supports our fire and emergency services and volunteers. Previously only insured property owners contributed directly to the fire and emergency services. Under the FESL, all property owners will contribute.
The FESL is calculated according to two factors depending on the classification of property as residential, farmland, industrial, commercial, public benefit or government:
1. A fixed charge (or ‘base rate’); and
2. A variable charge based on unimproved land value used by councils for rating as determined by the NSW Valuer General.
A discount will be available for vacant residential, commercial or industrial land.
Councils are responsible for classifying all land including non-rateable land within their boundaries into six relevant FESL land categories:
The Fire and Emergency Services Levy Bill 2017 (available here) provides the definition of each land classification as well as the criteria for a vacant land sub-classification.
Notifications will be sent to all property owners in late April advising of the classification of their property, and providing additional information about the FESL. For those properties receiving a fourth quarter instalment notice, these notifications will be included with your notice. For those properties that are not due to receive an instalment notice, the classification notification and FESL information will still be sent on its own.
If you disagree with the category in which your property has been classified, you may request a review by Council by completing the FESL Classification Review Form and submitting it to Council with the application fee. The fee has been set at $50.00 per Council’s 2017/2018 Fees and Charges. (Note: this fee has been waived by Council until 31st December 2017).
If a change to your land classification is made by Council, they will advise you within 30 days from the date that the change occurs. If the review proves the property should be classified as requested (ie Council’s original classification of the property was incorrect), the application fee paid will be refunded.
If you are dissatisfied with the outcome of the review, you may appeal to the Land and Environment Court.
Councils must also review and revise the FESL classifications for individual properties when zoning changes are made or changes of use are approved.
Property owners who currently receive a Council rates concession in respect of their principal place of residence automatically receive the FESL concession as well. Application forms to receive the Pension Concession rebate on rates can be found here.
There is a 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.
From 1 July 2017, the insurance-based Emergency Services Levy (ESL) will be abolished, and replaced by the FESL – paid alongside council rates.
Insurers should drop residential property insurance prices, on average, by up to 20% when the Emergency Services Levy is removed from insurance policies. The cost of commercial property insurance should fall by even more, up to 30%.
The Insurance Monitor has been set up to make sure insurers do the right thing when the levy is removed. Penalties up to $10 million apply to insurers who charge unreasonably high premiums or engage in false or misleading conduct with the removal of the Emergency Services Levy.
Landowners will only contribute once each financial year to the funding of fire and emergency services.
“I’ve only recently renewed my home insurance, and paid the emergency services levy then – why do I have to pay again to Council?”
When insurance on a property is renewed at any time during the 2016-17, the ESL component is the landowner’s contribution for the twelve months ending on 30 June 2017. When the FESL commences in July 2017, landowners will contribute to fire and emergency services funding for 2017-18.
While the insurance policy may extend into 2017-18, the ESL contribution is made for the financial year in which the policy commences. This is true even where insurance customers choose to pay their annual premiums through monthly payments.
Jo owns a house in Campbelltown and renews her insurance in February each year. When Jo renewed her insurance in February, 2017 the premium included $200 of emergency services levy. This was Jo’s contribution to the budgets of the three fire and emergency service agencies during 2016-17.
In July 2017, Jo receives her council rates notice for 2017-18, which includes a line setting out her FESL liability of $160. This is Jo’s contribution to funding the fire and emergency services in 2017-18. If Jo decides to pay her rates and FESL in quarterly instalments, her first FESL quarterly instalment, due by 31 August 2017, will be $40.