THE RECENTLY passed Fire Services Property Levy Bill 2012 will introduce an additional annual levy upon all Victorian land from 1 July 2013. And this is intended to create a more equitable system for funding Victoria’s fire services.
Currently, a fire services levy is imposed by insurance companies upon Victorian land owners who have taken out policies to insure their property. As insurance companies are required to provide funding to Victoria’s fire services, this levy is designed to cover their contribution.
Additionally, councils who are serviced by the Metropolitan Fire Brigade also contribute to the cost of fires services, recovering their costs through rates notices.
Widening the Number of Contributors
In an effort to spread the responsibility to all land owners (regardless of their insurance status), the Fire Services Property Levy Bill 2012 will impose a levy on all Victorian land to replace the insurance-based funding arrangements for Victoria’s fire services.
According to the explanatory memorandum, the levy is intended to recover 87.5% of the statutory contribution to the MFB budget and 77.5% of the statutory contribution to the CFA budget; plus the administration costs for both.
All land owners will be responsible for the levy — having to pay the levy annually in respect of each property held. And where an owner has several properties capable of separate assessment, then the owner will be liable to pay up to the maximum levy in respect of each property.
Councils will be appointed as collection agents, and the Commissioner of State Revenue will monitor the performance of the collection agencies and pay the received monies into the Consolidated Fund.
What does this mean for Property Owners?
Property owners will now directly bare the responsibility for this levy — with residential properties to be charged at a lower rate than business and industrial properties.
New owners of leviable land must be aware that they are liable for any current levy amount payable, plus any levy amount in arrears in respect of the land. As the levy will operate as a charge on the land, it is advisable that purchasers be wary of any unpaid rates and levies they may be responsible for when acquiring a property.
Bottom Line: Due diligence is particularly important as the collection agency may sue for the recovery of any unpaid levy amount.
In light of this new Bill, land owners and landlords must amend any contracts and leases to ensure that outgoings include scope for this new levy; and also, that all obligations under the new system are being met.