Which Policies Get Victoria’s 7% Business Insurance Duty in 2026-27?

For contracts effected or renewed from 1 July 2026 to 30 June 2027, Victoria’s business insurance duty rate is 7% on premium parts that must be reported to APRA under a specified class, while premium parts that are not business insurance remain at 10%, according to the State Revenue Office guidance, updated 1 July 2026. The named classes are aviation; cyber and directors and officers (D&O), each from 1 January 2025; employers’ liability; fire and industrial special risks (ISR); marine; public and product liability; and professional indemnity. Figures checked 1 October 2026.

What makes insurance “business insurance” for this change?

Business insurance is not simply any policy purchased by a business. It is general insurance within specified classes under APRA’s Prudential Standard. The named class list is not an exhaustive guide to every policy type that may qualify, because an insurance kind not listed in the Prudential Standard may still fall within the change when the insurer must report its premium to APRA under a specified class.

Several boundaries matter:

• Cyber and D&O: A relevant contract effected or renewed before 1 January 2025 is not business insurance under this change. These classes are included from 1 January 2025.
• Other Prudential Standard classes: General insurance in classes such as householders, commercial motor, travel and mortgage is not business insurance for this change. Premium or part-premiums for general insurance that is not business insurance remain subject to 10% duty.
• Unlisted insurance: The policy name does not always decide the treatment. In the State Revenue Office example, a business interruption contract effected on 1 July 2024 was treated as business insurance because the insurer reported its premium under the fire and ISR class. Its duty rate in that example was 9% as at 1 July 2024.
• Government Gazette declarations: The Treasurer can declare that insurance within a specified class is not business insurance. On 20 June 2024, the Treasurer declared that public liability insurance attaching to householder insurance policies would not be business insurance from 1 July 2024.

How is a packaged premium divided?

General insurance in a specified class is business insurance whether it stands alone or forms part of a packaged contract. If a package contains both:

• premium parts reportable to APRA under specified classes; and
• premium parts that are not business insurance,

the premium must be apportioned. The decreasing business insurance duty rate applies to the reportable parts, while the other parts remain rated at 10%. The package does not automatically receive 7% as a whole.

The State Revenue Office’s rural and working farm example, effected on 1 July 2026, illustrates the split:

Which date controls the duty rate?

The State Revenue Office determines the rate by the date the contract is effected or renewed. The date the premium is paid does not affect the rate.

The rate reduces by 1% each financial year over 10 years, with business insurance duty fully abolished for relevant contracts effected or renewed on or after 1 July 2033. The reduction applies automatically; businesses do not need to apply to receive it.

The 0% endpoint applies to business insurance. General insurance that remains outside the business insurance definition continues to carry 10% duty.

How do endorsements affect the rate?

The applicable rate for a premium increase caused by an endorsement depends on the endorsement’s effective date.

In the State Revenue Office example:

• the original contract was effected on 1 February 2026 and attracted 8% duty;
• an endorsement effective on 1 July 2026 added business insurance and increased the premium; and
• duty on the increased premium was charged at 7%.

The endorsement’s effective date therefore determines the rate used for that increase.

What happens if the premium is refunded?

An insurer is entitled to a duty refund when it refunds all or part of a dutiable premium for which duty has been paid. For business insurance, the refund corresponds to the original duty paid on the premium amount refunded.

The refund is calculated using the date the contract was effected or renewed, not the cancellation date. In the State Revenue Office example, a contract effected on 1 January 2026 carried 8% duty. When part of its premium was refunded on 1 July 2026, the duty refund remained calculated at 8%.

What should a small business check?

This is general information, not financial or legal advice. Before relying on the reduced rate:

• check the current State Revenue Office guidance and any Victorian Government Gazette declaration;
• review the policy’s Product Disclosure Statement (PDS);
• check when the contract was effected or renewed;
• note the effective date of any endorsement that changes the premium; and
• ask the insurer to explain the APRA classification and apportionment of any packaged premium.

The State Revenue Office also identifies Revenue Ruling DA-068, Abolition of duty on business insurance, as detailed guidance on applying the reduction.

Sources

• Abolition of duty on business insurance premiums | State Revenue Office

FAQ

Does every part of a packaged policy get 7% in 2026-27?

No. Any APRA-reportable premium parts within specified classes are rated at 7% when the contract is effected or renewed during that period. Non-business parts remain at 10%, so a mixed package must be apportioned.

Are cyber and D&O included for older contracts?

No. Cyber and D&O general insurance is not business insurance under this change when the relevant contract was effected or renewed before 1 January 2025. The classes are included from 1 January 2025.

Does the date I pay the premium determine the duty rate?

No. The contract’s effected or renewed date determines the rate. The premium payment date does not affect it.

Is a duty refund calculated at the rate when the premium was cancelled?

No. A business insurance refund corresponds to the original duty paid on the amount refunded and is calculated using the contract’s effected or renewed date, not the cancellation date.

Do businesses need to apply for the reduced duty rate?

No. The State Revenue Office says the reduction applies automatically. Businesses do not need to apply to receive the reduced rate.