Victoria removes life insurance stamp duty

The Victorian State Government has announced it will remove stamp duty on life insurance.
victoria remove life insurance stamp duty
The new measure, which will come into affect from the 1st of July 2014, is expected to save Victorian’s approximately $16 million over 4 years.

Historically, Victorians have paid 5% in stamp duty on life insurance which is a similar amount paid by the other states in Australia.

Life Insurance Type NSW ACT QLD VIC Tas SA WA NT Included in Base Premium
Life Insurance 5% 3% 5% 5% 5% 1.5% 0% 5% Yes
Accidental Death 5% 3% 5% 10% 10% 11% 10% 10% Additional Charge
TPD 9% 6% 7.5% 10% 10% 11% 10% 10% Additional Charge
Accidental TPD 9% 6% 7.5% 10% 10% 11% 10% 10% Additional Charge
Trauma 9% 6% 7.5% 10% 10% 11% 10% 10% Additional Charge
Income Protection and Business Expenses 5% 6% 7.5% 10% 10% 11% 10% 10% Additional Charge
Accidental Income Protection 5% 6% 7.5% 10% 10% 11% 10% 10% Additional Charge
Child Cover 5% 3% 5% 5% 5% 1.5% 0% 5% Yes

The 5% reduction in stamp duty would save the average $1,000 premium $50.00 per year.

John Brogden, CEO of the Financial Services Council (FSC) welcomes the changes and hoped other state governments would follow suit.

“The move by the Victorian Government and the ACT’s tax reforms in 2013, have shown that good process, some policy nous and courage can deliver.

“We hope other governments in Australia can follow this lead.”