A new Emergency Services and Volunteers Fund Levy will replace the Fire Services Property Levy, with higher rates set to impact property owners.
The current Fire Services Property Levy
The Fire Services Property Levy (“FSPL”) is an annual levy paid by Victorian property owners to fund the services provided by Fire Rescue Victoria and the Country Fire Authority.
The FSPL is collected by the relevant councils through rates notices and the FSPL liability comprises:
- a fixed charge, with non-residential properties subject to a higher rate than residential properties; and
- a variable charge, which is based on the property’s land use classification (e.g. residential, commercial, industrial, vacant, etc) and the Capital Improved Value (“CIV”) of the property.
A property’s land use classification is based on the Australian Valuation Property Classification Code (“AVPCC”), which is a code allocated to a property by the Valuer-General for rating valuation purposes. Both the AVPCC and the CIV are recorded on the property’s rates notices.
The new Emergency Services and Volunteers Fund Levy
The new Emergency Services and Volunteers Fund Levy (“ESVFL”) will replace the FSPL from 1 July 2025 following the passage of the controversial Fire Services Property Amendment (Emergency Services and Volunteers Fund) Bill 2025 by the Victorian Parliament on 16 May 2025. While not strictly speaking a new budget measure given the earlier announcement, it is relevant to the 2025-26 budget discussions particularly given the fierce debates regarding the levy and passage of the Bill in the lead up to the release of the Budget on 20 May 2025.
The key changes under the ESVFL as compared to the FSPL include:
From 1 July 2025
- An increase of the variable charge;
- Abolition of vacant land as a separate land use classification and reallocation based on its intended used (e.g. vacant industrial land will be reclassified as industrial land); and
- Introduction of an offset (rebate) for eligible volunteers.
From 1 July 2026
- Increase in the fixed charge for residential properties that are not used as the landowner’s principal place of residence (“PPR”).
Certain pre-existing exemptions and discounts will continue to apply, including the exemption for single farm enterprises. However, the single farm enterprises exemption will continue to only apply to the fixed charge component and will not apply to the increased variable charge of the new ESVFL, which as noted below will be significantly increased for land classified as primary production land.
As with the FSPL, the ESVFL will be collected by the relevant councils through rates notices.
The proposed ESVFL rates for 2025-26 are summarised below together with a comparison against the current rates:
| Land Classification | Current 2024-25 rates | Proposed 2025-26 rates | |||
| Variable charge (cents per $1,000 CIV) | Fixed charge ($) | Variable charge (cents per $1,000 CIV) | Fixed charge ($) | Percentage increase in variable charge | |
| Residential | 8.7 | 132 | 17.3 | 136 | 98.85% |
| Commercial | 66.4 | 267 | 133 | 275 | 100.30% |
| Industrial | 81.1 | 267 | 133 | 275 | 64.00% |
| Primary Production | 28.7 | 267 | 71.8 | 275 | 150.17% |
| Public Benefit | 5.7 | 267 | 5.7 | 275 | 0.00% |
| Vacant | 29.0 | 267 | N/A | N/A | N/A |
How does the new ESVFL impact you?
The majority of property owners are expected to pay a higher levy from 1 July 2025 (compared to the FSPL for previous periods) due to the higher rate for the levy, with a greater impact on properties with higher CIVs. Properties classified as primary production will see the highest percentage increase in the variable charge of over 150%.
The examples below illustrate the increases in the levy payable on the higher variable charge rates:
- For a property classified as commercial with a CIV of $1 million, the levy payable is as follows:
- Using the new ESVFL rates: $1,605
- Using the old FSPL rates: $931
- Percentage increase in the levy payable: 72.40%
- For a property classified as primary production with a CIV of $1 million, the levy payable is as follows:
- Using the new ESVFL rates: $993
- Using the old FSPL rates: $554
- Percentage increase in the levy payable: 79.24%
What are the key impacts to consider?
While most of the attention has been on primary production properties, owners of other types of properties such as residential, commercial and industrial properties should be aware that they will see an increase in the levy payable from 1 July 2025. This increase is in addition to other recent and upcoming increases in property taxes, such as the 10-year increase in land tax rates due to the COVID-19 debt levy, the expansion of the Vacant Residential Land Tax to the whole of Victoria from 1 January 2025 as well as to certain types of unimproved/undeveloped lands from 1 January 2026.
Owners of non-PPR residential properties should also expect to pay a higher ESVFL from 1 July 2026 as these properties will have the same higher fixed charge rate as other non-residential properties.
Furthermore, based on our experience, the AVPCC, which is also used for other types of taxes such as the Commercial and Industrial Property Tax and Vacant Residential Land Tax, can be a flawed concept. This is due to the allocation of AVPCC involving some degree of subjectivity and chance, as well as potential timing mismatches where the nature of the property changes. Accordingly, the AVPCC allocated to a property may not necessarily reflect the true nature of the property. This is relevant to the impact of the ESVFL given the AVPCC is used to sort properties into the various classifications (such as residential, commercial etc.), which then dictates the applicable ESVFL rate.
What are the next steps?
If you have any questions about the levy and its potential impacts on your circumstances, please contact your Pitcher Partners representative.
