Having previously warned of a spate of new taxes set to impact SMSFs with Victorian investment, DBA Lawyers director Daniel Butler said a substantial increase of between 100 and 190 per cent to the Fire Services Property Levy (FSPL) could make the impact even greater.
According to Butler, other than limited exemptions and concessions, all property owners in Victoria are required to pay the FSPL, which is to be renamed to the Emergency Services and Volunteers Fund (ESVF) from 1 July 2025.
Beyond being a cosmetic change, the renaming of the levy reflects the additional services that will be covered, such as Triple Zero Victoria, the State Control Centre, Emergency Management Victoria, and Forest Fire Management Victoria. The levy also funds Fire Recovery Victoria, the Country Fire Authority and Fire Rescue Victoria.
“There is a fixed amount and a variable rate involved in calculating the levy each year,” Butler said.
“The fixed amount for residential property will increase, in line with CPI for Melbourne, from $132 to $136. For other types of land, the fixed rate will rise from $267 to $276 between the 2024-25 and 2025-26 period, e.g. commercial or industrial land will be $276 plus the variable rate from 1 July 2025.
“The variable rate will undergo a substantial increase. The variable rate is calculated as a prescribed cent value per $1,000 of the property’s Capital Improved Value (CIV).”
For residential and non-residential principal places of residence (PPR) the variable rate will increase from 8.7 to 17.3 cents (around 99 per cent), for commercial land it will rise from 66.4 to 133 cents (around 100 per cent), while industrial land will increase from 81.1 to 133 cents (around 64 per cent), and primary production land will jump around 189 per cent from 28.7 to 83 cents.
“The Department of Treasury and Finance (DTF) has calculated that the median ESVF liability will rise from $191 to $254 for PPRs, from $748 to $1,240 for commercial land and from $859 to $1,247 for industrial land as a result of the increased variable rates,” Butler said.
“The median ESVF for primary producers will increase from $621 to $1,299 (around a 109 per cent increase).”
He added that while these median increases are substantial, some are going to be slugged even more, noting that some farmers will see “massive increases” of more than 170 per cent on their levy for 2025–26 compared with their 2024–25 levy.
“For example, a farmer with $2 million of land will have a 130 per cent increase in 2025-26 compared to their 2024-25 levy, and if a farmer has a $5 million farm, they will have a 160 per cent increase in the levy in 2025-26,” Butler said.
The only exemption to the ESVF is for active volunteers and life members for emergency services volunteers.
“This exemption will only be available for an individual’s primary place of residence (such as a house or farm). This is designed to encourage more Victorians to volunteer to provide emergency services,” he said.
However, farmers with multiple properties that operate as a single enterprise may also be eligible to pay a single fixed charge under the single farming enterprise exemption, while holders of pensioner concession cards and Department of Veterans’ Affairs Gold Cards will be entitled to a $50 concession on their levy, claimable once per property per year.
“Many are reviewing their property investments in Victoria given recent tax increases and the introduction of a range of new taxes including the Vacant Residential Land Tax (VRLT), the short stay levy and an increase in other property costs,” Butler said.
“In some cases, clients are finding the net rent does not even cover the tax payable even where there is no interest payable on loans.”
When the GST was introduced in 2000, all other indirect State taxes were to be abolished. The effort of the Democrats to keep fresh food exempt resulted in transfer stamp duty to be retained (in NSW at least) and this has cost taxpayers millions more than 10% on fresh food. Further many State “levies” are imposed, and if new post GST charges are quite probably illegal, if the GST legislation includes, as it should, a prohibition on other State indirect taxes.