Insurance

New fire levy rates announced

Rates for controversial new fire and emergency levies that will impact on property insurance policy holders have been announced by the government.

Thursday, March 30th 2017

The new levies are to fund New Zealand’s fire and emergency services, which are in the midst of being merged into one organisation - Fire and Emergency New Zealand (FENZ).

They will come into effect on July 1 this year, although they are set to be changed again next year.

People with house and contents insurance will now have to pay about $36 more each year, with the levy increasing by around $0.70 per week.

The total levy on house and contents insurance will increase to $127.20 per year.

At the moment, residential property insurance holders pay around $91.20 per year.

Internal Affairs Minister Peter Dunne said the new levy rates will ensure that FENZ has the necessary funding to deliver essential fire and emergency services to both rural and urban communities.

“Some commercial and public entities will face larger increases, though the new legislation will allow for certain measures to address affordability and fairness concerns that were raised during the consultation process.”

He added that rural fire services will no longer be funded by local government from rates and the government expects those savings to be returned to ratepayers.

To date, the new levies have attracted considerable criticism from the likes of the Property Council and the Insurance Council.

The Property Council is not happy with the proposed new levies because while there is a cap for residential property owners, there isn’t one for commercial property owners.

They estimate that nearly 60% of the total levy will come from non-residential property owners and 37% from residential property owners.

Property Council director of policy and advocacy Alex Voutratzis said the levy changes will add substantial financial impost to the insurance that commercial property owners already pay.

“This, in turn, reduces returns from commercial investments as more profits from investments are needed to fund these levy increases.

“These proposed increases are another example of a funding burden unfairly falling on the shoulders of the apparently deep-pocketed property sector.”

For the Insurance Council’s CEO, Tim Grafton, a major issue with the new regime is how to apply the levy to different types of property owners.

This is particularly in situations where there might be a mixed residential and commercial building or different types of businesses in a commercial building.

He said other issues include exemptions and proposals to smooth the passage of payment for the biggest payers which could impact on to others.

The government is consulting on the details of the new regime until April 19. The Fire Services Transition discussion paper is here

Read more:

New fire regs costly, more complex for investors 

Fire levies unfair for investors 

Comments

No comments yet

Heartland Bank - Online 6.69
SBS FirstHome Combo 6.74
Wairarapa Building Society 6.95
Unity 6.99
Co-operative Bank - First Home Special 7.04
ICBC 7.05
China Construction Bank 7.09
BNZ - Classic 7.24
ASB Bank 7.24
ANZ Special 7.24
TSB Special 7.24
Unity First Home Buyer special 6.45
Heartland Bank - Online 6.45
China Construction Bank 6.75
TSB Special 6.75
ICBC 6.75
ANZ Special 6.79
ASB Bank 6.79
AIA - Go Home Loans 6.79
Kiwibank Special 6.79
BNZ - Classic 6.79
Unity 6.79
Westpac Special 6.39
China Construction Bank 6.40
ICBC 6.49
SBS Bank Special 6.55
Kiwibank Special 6.55
BNZ - Classic 6.55
Co-operative Bank - Owner Occ 6.55
ASB Bank 6.55
AIA - Go Home Loans 6.55
TSB Special 6.59
Kainga Ora 6.99
SBS FirstHome Combo 6.19
AIA - Back My Build 6.19
ANZ Blueprint to Build 7.39
Credit Union Auckland 7.70
ICBC 7.85
Heartland Bank - Online 7.99
Pepper Money Essential 8.29
Co-operative Bank - Owner Occ 8.40
Co-operative Bank - Standard 8.40
First Credit Union Standard 8.50
Kiwibank 8.50

More Stories

Support for regulation

Monday, March 18th 2024

Support for regulation

REINZ has emphasised the need for property management regulation to Parliament’s Social Services and Community Committee.

A better investment market

Thursday, March 14th 2024

A better investment market

“Reinstatement of interest deductibility starting from the new tax year on 1 April brings property investors back in line with every other business in the country, where interest costs are a legitimate deductible expense," Tim Horsbrugh, New Zealand Property Investors Federation (NZPIF) executive committee member says.

[OPINION] Recessionary times

Thursday, March 14th 2024

[OPINION] Recessionary times

It is not the best out there for many businesses and property sector people. Sales are down across the board, our clients’ confidence is falling, and there is a lot of uncertainty.

Interest rate expectations: It’s not over yet

Thursday, March 07th 2024

Interest rate expectations: It’s not over yet

Most Kiwis think interest rate increases have peaked.