What is the transitional levy?

When the Fire and Emergency New Zealand Act 2017 came into force, a transitional levy on fire insurance policies was established. The transitional levy was intended to provide a stable source of funding while we worked through the process to set a new levy under the provisions in Part 3 of the Act. This levy provides almost 100% of Fire and Emergency’s funding.

Implementation of the new Part 3 levy was deferred by the Government. This was to enable a review into the funding model for Fire and Emergency and, subsequently, to make changes to the existing funding model to ensure it is simple to implement to minimise unnecessary cost and disruption. This means the transitional levy will remain in place until July 2026, when the Part 3 levy comes into force under the Fire and Emergency New Zealand (Levy) Amendment Act 2023.

Proposal to increase the transitional levy

From 5 April – 2 May 2023 we held a public consultation on a proposal to increase the transitional levy. We proposed the increase in order to raise more short-term revenue over the 2024/25 and 2025/26 financial years, to ensure we can effectively keep doing what we do until the levy system changes take place in 2026.

We considered that reducing spending on firefighters and vital equipment would have resulted in a Fire and Emergency network that is unable to fully service New Zealand communities effectively and remain fit-for-purpose for our crews.

• Consultation document: Funding Fire and Emergency Services for all New Zealanders

We received 19 submissions from organisations and individuals. We thank all those who made the time and effort to give us their feedback throughout the process.

• Summary of submissions: Transitional Levy Consultation Summary of Submissions
• Individual submissions:

Aviation New Zealand	BusinessNZ	Farmers Mutual Group (FMG)
Federated Farmers	Forest Owners Association	IAG
IBANZ	ICNZ	Juken New Zealand (JNL)
NZ Institute of Forestry	Property Council New Zealand	Rangitikei District Council
Timaru District Council	Wenita Forest Products
Individual submission #1	Individual submission #2	Individual submission #3
Individual submission #4	Individual submission #5

What was decided

On 3 August 2023 the Government announced its decision to increase the Fire and Emergency transitional levy on insurance policies by 12.8%, effective 1 July 2024.

• Announcement: The Fire and Emergency transitional levy will be adjusted in July 2024. 
• Gazette Notice Under the Legislation Act 2019 - 3 Aug 2023

What the increase means for insurance policy holders

The increase equates to maximum annual levy increases, excluding GST, of:

• $13.50 per home insured
• $2.70 per contents policy
• $1.08 per motor vehicle less than 3.5 tonnes

Levies on non-residential property remain uncapped and increase by 12.8%. There are no other changes to the transitional levy aside from the increased rate.

The regulations giving effect to these changes have been published on the New Zealand legislation website: Fire and Emergency New Zealand (Levy Rates and Information Requirements in Transitional Period) Amendment Regulations 2023 (SL 2023/183) Contents – New Zealand Legislation.

Updated guidance for insurers and other levy payers: Fire and Emergency levy rate.