I own a commercial property

Commercial property owner

If you own a retail, business or office property and insure the buildings or contents you will already be paying the Emergency Services Levy (ESL) via your insurance premiums.  

From 1 July 2017, the Government will abolish the current insurance-based Emergency Services Levy and replace it with the Fire and Emergency Services Levy (FESL) paid by property owners alongside council rates. 

The FESL will be calculated according to two factors depending on the classification of property as residential, farmland, industrial, commercial, vacant or public benefit:

  1. A fixed charge; and
  2. A variable charge based on unimproved land value  as determined by the NSW Valuer General (visit the 'How much will the FESL cost?' section in our FAQs for a definition of unimproved land value).

The exact rates are available here

The Insurance Monitor estimates that the removal of the ESL will mean the cost of commercial property insurance should fall by up to 30%. [Note: % off total gross payment]

The reform will mean the obligation of funding NSW's fire and emergency services will no longer fall only on those with property insurance, but all property owners.

What about vacant commercial land?

Vacant commercial land will be subject to lower levy rates. Owners or lessees will be required to make an application to their councils for a sub-classification of ‘vacant’.

Commercial is the default classification for leviable land. If land cannot be classified under one of the other property sectors, it is to be classified as commercial land.

Vacant ’Residential’, ‘Commercial’ or ‘Industrial’ land may be classified as ‘Vacant’ if:  

  1. it has been classified as ‘Residential’, ‘Industrial’ or ‘Commercial’ and 
  2. there are no buildings or structures (complete or incomplete) on the land that are being used or that could be used for a ‘Residential’, ‘Industrial’ or ‘Commercial’ purpose, and
  3. the land is not being used for storage or treatment of goods, materials or any other item.

You may apply to your council to seek a ‘Vacant’ land sub-classification. This may be done via a standard form that council may have on its website, or through some other means advised to you by the council.

Your council may charge an application fee (currently up to $50) for reviewing an application for ‘Vacant’ status under FESL. If your application is successful, any fee charged by council will be refunded.