The Victorian Government will not impose stamp duty or GST on the property charge that replaces the fire services levy (FSL) from July 1.

Removing the “tax on a tax on a tax” of the base premium and FSL will save householders 20% a year, or about $100 million, Treasurer Michael O’Brien says.

The industry’s 15-year campaign against the FSL was based around the argument that the 10% stamp duty and GST added significantly to the cost of cover because they were on top of the base premium and FSL.

Last year, when the levy requirement on insurers was raised to pay for the recommendations of the 2009 Victorian Bushfires Royal Commission, the FSL on premiums jumped. The combined FSL-stamp duty-GST sometimes amounted to more than the base premium.

Under the new property charge the Government will collect the same amount for the fire services, grossed into one figure, according to anti-FSL campaigner Allan Manning.

“They’re not going backwards,” he told insuranceNEWS.com.au.

The Insurance Council of Australia has welcomed the property charge. It says the FSL is an inequitable way to support emergency services because only insurance customers pay, while everyone gets the benefit.

The incoming fire services property levy on Victorian council rates will have a $100 fixed charge component for households and $200 for other properties, plus a charge based on the capital-improved value of the property.

The contribution of the average household in the Metropolitan Fire Brigade zone will drop from $195 in 2011/12 to $143 in 2013/14, Mr O’Brien says.

The levy for the Country Fire Authority zone will drop from $262 to $142.