Alarm as Fireys levy sparks strata fears


A wave of panic has run through StrataLand in the past couple of weeks  – hardly a tsunami but more than a ripple – with the news that the Fire and Emergency Services Levy (FESL) was going to be removed from insurances and added to your council rates.

More than one reader thought this mean that they would be paying more, based on the government’s literature which was (as usual) mostly about houses.

“I understand that from July 1st, the annual fire services levy will be collected via council rates rather than via buildings insurance,” says Kendle on the Flat Chat Forum.

“It is stated by Treasury NSW that this will amount to a saving for homeowners. However we pay $85 per unit. The average cost to individual ratepayers from July 1st is being quoted as anything from $180 to $450.

“Either way, it seems to me that if you live in a strata scheme you are going to be paying a lot more. Has anyone got further information on this?”

Well, yes, we have but let’s take it back to basics.

The Fire and Emergency Services Levy is currently attached to a number of insurance premiums, from home and contents to car and motorbike policies.

The idea is if you have something worth insuring, you’d probably rather it didn’t go up in flames in the first place, rather than claiming for it afterwards.

“Hang on,” thought one pointy head in the government.  “Doesn’t that mean that people who take the trouble to insure their goods and chattels are paying for the fire brigade and SES people to attend the homes of slackers who don’t?”

A better way to share the load was to add the levy to your rates rather than your insurance because more people pay the former than the latter.

So, from July 1, the load will be spread more evenly across a broader slice of the populace, being roughly defined as “home owners who would quite like the fireys to turn up when there’s a fire.”

It seems much fairer but, as in everything, there will be winners and losers.  The winners will be renters who will no longer have to pay the levy on their insurance and won’t have to pay the increased rates (because that goes to the landlord).

And those of us who own our homes and are insured to our eyeballs will also benefit from a lower levy on our rates than we pay on our insurance.

The losers will be the great uninsured home owners as well as landlords who will take at least one rent rise cycle before they can shift the load to their tenants.

As for strata residents, a nice young man from Treasury assures me that some unit owners will pay a little more and some a little less but it won’t be anything too dramatic, either way.

We shall see. There’s more official information on this here. And you can tell us which way your charges go on the flat-chat.com.au/forum.

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