Queensland is on track to collect more than $2 billion in stamp duty from insurance premiums by the 2027-28 fiscal year, according to state budget projections.
The growth in government revenue aligns with a steady rise in home and contents insurance costs, which has drawn attention from both policyholders and industry stakeholders.
Brisbane resident Anne Sharrocks, who lives in Middle Park, told ABC that her annual home insurance premium has increased by over $1,000 this year, now totalling $10,847. Of this amount, $895 was paid as stamp duty to the Queensland government, and $904 as GST.
Despite receiving a 30% discount for not making any claims, Sharrocks said the cost of insurance is now a significant portion of her monthly expenses, especially as she relies on a state pension.
She said her home was damaged in the 2011 floods, but her insurer at the time did not cover riverine flooding.
Sharrocks now pays $903 per month for insurance, which she said is a challenge to manage on a fixed income.
The Insurance Council of Australia (ICA) has repeatedly called for state governments to reconsider the application of stamp duty to insurance products.
ICA CEO Andrew Hall has described the tax as a penalty for responsible behaviour and has advocated for its reduction or removal.
Associate professor Kirsten McDonald from Griffith University said that the combination of rising premiums and stamp duty is prompting some Queenslanders to reconsider maintaining insurance coverage.
“It’s certainly a prompt for the government to look at reform on stamp duty,” she said, as reported by ABC.
She noted that the Australian Capital Territory is the only jurisdiction in Australia that does not impose stamp duty on insurance.
McDonald also pointed out that stamp duty tends to affect lower-income households more severely, as wealthier individuals may be able to absorb higher costs or select higher excesses.
She said the combined effect of stamp duty and GST can make insurance unaffordable for some, contributing to underinsurance in lower socioeconomic groups.
“Lower socioeconomic groups are where we tend to see underinsurance,” McDonald said.
Queensland Treasurer David Janetzki has pointed to targeted cost-of-living measures in the state budget – as well as investments in mitigation and resilience – as efforts to address rising household costs.
“We know household budgets continue to come under pressure, which is why since forming government, we’ve taken decisive and immediate action on meaningful and targeted cost-of-living relief for Queenslanders who need it most,” he said, as reported by ABC. “We’re investing in mitigation and resilience measures while our comprehensive plan to deliver safety where you live also puts downward pressure on insurance premiums.”
Sharrocks expressed concern that the increasing cost of insurance and associated taxes could lead more people to forgo coverage.
“I can just about pay this. I do know a lot of people don’t insure their houses. They’ve got to make it viable for people to insure,” she told ABC.
The debate over insurance stamp duty is expected to continue as premiums and government revenues rise, with industry and consumer advocates calling for policy changes to improve affordability and coverage rates.
Rising home and contents insurance premiums come as the Australian Securities and Investments Commission (ASIC) calls on general insurers to improve oversight of third-party experts and enhance communication with policyholders regarding cash settlements.
This follows ASIC’s review of home insurance claims practices, particularly in response to claims from the 2022 floods.
ASIC’s assessment focused on how seven insurers responded to recommendations in its 2023 report, “Navigating the Storm: ASIC’s review of home insurance claims.”
While insurers have increased monitoring of builders and repairers, ASIC found that oversight of independent experts such as engineers and hydrologists remains inconsistent.
The regulator noted that insurers often lack structured processes to verify the accuracy or quality of expert reports, relying instead on claims staff who may not have the necessary technical expertise.
ASIC also identified shortcomings in how insurers communicate cash settlement options to customers.
Although a fact sheet outlining settlement options is required by law, many insurers provided only minimal information, and the process for requesting a review was often unclear.
