Victoria Business Insurance Duty in 2026-27: Is the Rate 7%?

Yes—for a contract of business insurance effected or renewed from 1 July 2026 to 30 June 2027, the Victorian duty rate is 7%. For a relevant premium increase caused by an endorsement, the rate is also 7% when the endorsement’s effective date falls within that period. The State Revenue Office (SRO) publishes both rules in guidance updated 1 July 2026; figures checked 1 October 2026.

How does 7% fit into the full duty reduction schedule?

The SRO sets the rate according to when the contract is effected or renewed:

Duty is therefore fully abolished for relevant contracts effected or renewed on or after 1 July 2033. The reduction applies automatically to qualifying business insurance; businesses do not need to apply for the lower rate.

Which types of insurance qualify for the reduced rate?

Only certain classes of general insurance are treated as business insurance for this change. The SRO identifies them using the Australian Prudential Regulation Authority’s (APRA) Prudential Standard:

• Aviation
• Cyber, from 1 January 2025
• Directors and officers (D&O), from 1 January 2025
• Employers’ liability
• Fire and industrial special risks (ISR)
• Marine
• Public and product liability
• Professional indemnity

Cyber and D&O contracts effected or renewed before 1 January 2025 are not business insurance for this change.

Other Prudential Standard classes, such as householders, commercial motor, travel and mortgage, are outside the reduced-rate treatment. However, an insurance type not listed in the Prudential Standard may still qualify if the insurer must report its premium to APRA under one of the specified classes.

The Treasurer can also make declarations about the definition of business insurance through the Victorian Government Gazette. For example, public liability insurance attached to householder insurance policies is not business insurance from 1 July 2024.

Does every part of a packaged policy receive 7%?

No. If a packaged contract contains both qualifying business insurance and other general insurance, the premium must be apportioned. The decreasing duty rate applies only to APRA-reportable premium parts within the specified classes; other premium parts remain rated at 10%.

The SRO’s rural and working farm example illustrates the split for a contract effected on 1 July 2026:

This means a policy sold as a package does not necessarily receive one duty rate across its entire premium.

Does the date I pay the premium determine the rate?

No. For a contract of business insurance, the SRO determines the rate from the date the contract was effected or renewed. The date the premium is paid does not affect that rate.

An endorsement has its own timing rule. The duty rate for a premium increase resulting from an endorsement depends on the endorsement’s effective date. In the SRO example:

The later endorsement date therefore produces a 7% rate for the increased amount, rather than changing the rate used for the original premium in that example.

What happens if an insurer refunds part of the premium?

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 calculation uses the date the contract was effected or renewed, not the cancellation date. In the SRO example, a contract effected on 1 January 2026 was rated at 8%. Although part of the premium was refunded on 1 July 2026, the duty refund remained calculated at 8%.

What should a business check before relying on 7%?

Check the current State Revenue Office guidance and the policy’s Product Disclosure Statement (PDS). The classification of the cover, the contract or renewal date, and any endorsement effective date can each affect how the 7% rate is applied.

Revenue Ruling DA-068, Abolition of duty on business insurance, provides detailed guidance on applying the reduction.

This is general information, not financial or legal advice. Confirm the current position with the regulator and the terms of your policy before relying on it.

Sources

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

FAQ

Is the Victorian business insurance duty rate 7% in 2026-27?

Yes. The rate is 7% for relevant business insurance contracts effected or renewed from 1 July 2026 to 30 June 2027. It also applies to a relevant premium increase caused by an endorsement effective during that period.

Does paying a premium in 2026-27 automatically attract the 7% rate?

No. The contract’s effected or renewed date determines the rate, not the premium payment date. An increase caused by an endorsement is rated according to the endorsement’s effective date.

Does a packaged insurance policy receive 7% across the whole premium?

No. Where the package includes specified business insurance classes and other classes, the premium must be apportioned. The qualifying APRA-reportable parts receive the reduced rate, while other parts remain subject to 10% duty.

What duty rate applies when an endorsement increases the premium?

The endorsement’s effective date controls the rate on the increased premium. Duty on an increase effective from 1 July 2026 to 30 June 2027 is charged at 7%.

How is a duty refund calculated after part of a premium is returned?

For business insurance, the refund corresponds to the original duty paid on the premium amount refunded. It is calculated using the contract’s effected or renewed date, not the cancellation date.