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Find out what stamp duty on car insurance is and how it works through Savvy’s helpful guide.
Fact checked
When it comes to car insurance in Australia, it's essential to have a clear understanding of all the factors that contribute to the cost. One of these factors which you may not know about is stamp duty. Stamp duty is a tax imposed by Australian state governments on various transactions, including car insurance policies.
Learn more about stamp duty and how it works with car insurance in Australia with Savvy. In our informative guide, we’ll delve into the details of stamp duty on car insurance, including how it’s calculated, exemptions or discounts available and more.
Stamp duty on car insurance is a tax imposed by state governments in Australia on insurance policies, including car insurance. It’s a one-time payment and is calculated as a percentage of the insurance premium. This is charged to your insurer, rather than you directly, by your state or territory government, after which the cost is typically passed onto you via your premium payments.
It's important to note that the way stamp duty works on insurance and its cost varies depending on the state or territory you’re living in so it’s important to consult with relevant government resources for the most up-to-date information
The calculation of stamp duty on car insurance varies among Australian states and territories. It’s generally based on a percentage of the total insurance premium, which includes the base premium and any additional charges or fees.
The percentage can range up to 10% or more of the premium amount, depending on the state or territory in which the car is registered. For instance, while this sits at 5% in New South Wales, it’s charged at a rate of 10% in Victoria and 11% in South Australia. From there, how your insurance premium is calculated and where the cost of stamp duty factors in will be up to your insurance company.
The calculation method and specific rates can change over time due to government regulations and policies, so if you’re unsure of how this might apply to you, it’s important to check your state or territory government website for relevant information.
The payment of stamp duty on car insurance is a legal requirement mandated by state governments around Australia. It helps generate revenue for government budgets and funds various public services, such as healthcare, education, infrastructure, and emergency services. The specific reasons for imposing stamp duty on car insurance may vary among states, but it’s a common practice across the country.
No – car insurance typically doesn’t come with any associated exemptions or discounts when it comes to stamp duty. The exemptions and discounts for stamp duty on car insurance are determined by the regulations of each state or territory government.
Some of the situations where your insurer may be eligible for an exemption (and not pass the cost of stamp duty onto you through your premiums) can include:
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Savvy’s comparison service includes selected products from a panel of trusted insurers and does not compare all products in the market. Any advice presented above or on other pages is general in nature and doesn’t consider your personal or business objectives, needs or finances. It’s always important to consider whether advice is suitable for you before purchasing an insurance policy. We always recommend readers to consult the Product Disclosure Statement (PDS) of different policies before purchasing your car insurance.
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© Copyright 2024 Quantum Savvy Pty Ltd T/as Savvy. All Rights Reserved.
Quantum Savvy Pty Ltd (ABN 78 660 493 194) trades as Savvy and operates as an Authorised Credit Representative 541339 of Australian Credit Licence 414426 (AFAS Group Pty Ltd, ABN 12 134 138 686). We are one of Australia’s leading financial comparison sites and have been helping Australians make savvy decisions when it comes to their money for over a decade.
We’re partnered with lenders, insurers and other financial institutions who compensate us for business initiated through our website. We earn a commission each time a customer chooses or buys a product advertised on our site, which you can find out more about here, as well as in our credit guide for asset finance. It’s also crucial to read the terms and conditions, Product Disclosure Statement (PDS) or credit guide of our partners before signing up for your chosen product. However, the compensation we receive doesn’t impact the content written and published on our website, as our writing team exercises full editorial independence.
For more information about us and how we conduct our business, you can read our privacy policy and terms of use.