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NSW gives up stamp duty with one hand, takes with the other: NIBA

The cut in stamp duty for home-buyers announced in yesterday’s New South Wales Budget will do nothing to ease the burden on property-owners who still have to pay increasing levels of state-imposed tax on their insurance, the National Insurance Brokers Association (NIBA) said today.

NIBA Chief Executive Noel Pettersen said NSW householders might find the purchase of a home slightly easier, but high taxes on insurance premiums (second only to Victoria, the world title-holder) mean those same home-owners will be paying far more stamp duty on home insurance than they should have to.

“The State Government recently raised its antiquated fire services levy on privately owned properties to 22% of the premium, and will also introduce a new $39 million State Emergency Service levy from July 1,” he said.

The NSW Government imposes the maximum figure possible on insurance stamp duty by adding up the premium and the levies to calculate the GST owing. It then uses that total figure to calculate the stamp duty.

“It’s a ridiculous situation,” Mr Pettersen said. “They make it cheaper for people to buy homes, and then crank up the taxes people have to pay when they insure their homes.”

He said only New South Wales, Victoria and Tasmania use the fire services levy, with other states in the past few years adopting a collection system based on property rates. This ensures that all property owners, not just those who choose to insure, pay for the upkeep of the fire services.

“The new SES levy is an invention of the NSW Government,” Mr Pettersen said. “Once again, only people who insure will pay.

“The Government is driving the cost of insurance higher and higher, and forcing home-owners – many of whom are finding the going pretty tough at the moment – to consider risking everything they’ve worked so hard for by not insuring.”

ENDS

For further information contact Noel Pettersen on 02 9459 4305.

NIBA is an independent industry association representing 500 firms and more than 2600 intermediaries, who handle almost 90% of the commercial insurance transacted in Australia. Brokers play a major role in insurance distribution, handling $10 billion in premiums annually and placing around half of Australia’s total insurance business.

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