According to the State Revenue Office’s guidance, dated 1 July 2026, a packaged Victorian cleaning policy is not automatically eligible for the reduction on its whole premium: where some parts are APRA-reportable under specified classes and others are not, the premium must be apportioned. Only the APRA-reportable specified-class portion receives the falling duty rate; the other premium parts remain at 10% (figures checked 1 October 2026). The qualifying duty rate drops by 1% each financial year from 1 July 2024 and reaches 0% on or after 1 July 2033; the reduction applies automatically, so businesses do not need to apply.
Which premium parts qualify for the reduction?
For this change, business insurance means general insurance in specified classes under the Australian Prudential Regulation Authority’s (APRA) Prudential Standard. Insurance in a specified class can qualify whether it stands alone or forms part of a packaged policy.
The packaged premium is therefore treated in two parts:
- APRA-reportable specified-class part: receives the decreasing business-insurance duty rate.
- Other part: remains subject to duty at 10%.
Selling several types of cover under one “cleaning policy” does not make the entire premium eligible for the phased reduction.
Which insurance classes count as business insurance?
The State Revenue Office identifies these specified classes:
- 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 insurance is not business insurance for this change when the relevant contract was effected or renewed before 1 January 2025.
Other Prudential Standard classes—including householders, commercial motor, travel and mortgage—are not business insurance for this change. Their premium, or part of their premium, remains at 10%.
There can also be a specific exclusion. On 20 June 2024, the Treasurer declared that public liability insurance attaching to householder policies would not be business insurance from 1 July 2024, despite public and product liability otherwise being a specified class.
How does the apportionment work?
The State Revenue Office’s rural and working farm example shows how a mixed package is divided. The contract effected on 1 July 2026 contains both business and non-business insurance, so its premium must be apportioned.
| Part of the State Revenue Office example | Classification | Duty rate at the 1 July 2026 endorsement effective date |
|---|---|---|
| Fire and industrial special risks | Specified class | 7% |
| Public and product liability | Specified class | 7% |
| Householders | Other class | 10% |
| Domestic motor | Other class | 10% |
This is an illustration of the allocation method, not a statement that every cleaning policy contains these sections. A cleaning policy’s actual treatment depends on its cover, how it is classified and which premiums the insurer reports to APRA.
What if the cover is not listed in the Prudential Standard?
An unlisted insurance type may still be business insurance if the insurer must report its premium to APRA under one of the specified classes.
For example, the State Revenue Office describes business interruption insurance effected on 1 July 2024 as unlisted but APRA-reportable under the fire and ISR class. The contract is therefore treated as business insurance, with duty set at 9% as at 1 July 2024.
Which date determines the duty rate?
For business insurance, the rate is set by the date the contract is effected or renewed. The date the premium is paid does not affect the rate.
The annual 1% reduction applies to the qualifying duty rate, not to the whole packaged premium:
| Date contract is effected or renewed | Business-insurance duty rate |
|---|---|
| On or before 30 June 2024 | 10% |
| 1 July 2024 to 30 June 2025 | 9% |
| 1 July 2025 to 30 June 2026 | 8% |
| 1 July 2026 to 30 June 2027 | 7% |
| 1 July 2027 to 30 June 2028 | 6% |
| 1 July 2028 to 30 June 2029 | 5% |
| 1 July 2029 to 30 June 2030 | 4% |
| 1 July 2030 to 30 June 2031 | 3% |
| 1 July 2031 to 30 June 2032 | 2% |
| 1 July 2032 to 30 June 2033 | 1% |
| On or after 1 July 2033 | 0% |
An endorsement that increases the premium has its own timing rule: the applicable rate depends on the endorsement’s effective date. In the State Revenue Office’s example, the original contract effected on 1 February 2026 was rated at 8%, while the increased premium from an endorsement effective on 1 July 2026 was charged at 7%.
What should a cleaning business check?
Check the State Revenue Office page for the current rules and the policy’s Product Disclosure Statement for its cover and packaged structure. If the treatment is unclear, ask the insurer which premium parts are reported to APRA and how the packaged premium has been apportioned.
This is general information, not financial or legal advice.
Sources
- Abolition of duty on business insurance premiums — State Revenue Office — publication/update date: 1 July 2026; figures checked 1 October 2026.
FAQ
Does every section of a packaged cleaning policy get the annual reduction?
No. Only premium parts that must be reported to APRA under specified classes receive the decreasing business-insurance duty rate. Other premium parts remain at 10%.
Is public liability always included in the phased reduction?
Public and product liability is a specified class, but public liability insurance attaching to householder policies is excluded from business insurance from 1 July 2024.
What if my insurance type is not listed in the Prudential Standard?
It may still qualify if the insurer must report the premium to APRA under a specified class. The APRA reporting treatment therefore matters, not just the name used for the cover.
Does the date I pay the premium determine the duty rate?
No. The contract’s effected or renewed date determines the rate. For a premium increase caused by an endorsement, the endorsement’s effective date applies.
Do I need to apply for the duty reduction?
No. The reduced rate applies automatically without businesses needing to apply.
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