GST hike could slash the cost of car home, and contents insurance in tax deal with states

THE cost of home, car and contents insurance could be slashed by up to 10 per cent under planned GST reforms.

But it is unlikely homebuyers will get any respite from stamp duty on property purchases with state governments still addicted to the volatile revenues the tax provides.

Treasurer Scott Morrison has warned the states any debate on increasing the rate or broadening the base of the GST will need to include the states agreeing to abolish or reform “nuisance taxes” regarded as inefficient.

The stamp duty on insurance, which combined with the GST can account for 20 per cent or more of the cost of insurance, is regarded as one of those state taxes to be targeted under GST reforms.

Households with $3000 of building, contents and motor vehicle insurance could save up to $300 annually or more if the emergency services levy, that applies in some states, was also removed.

Savings for a business with $10,000 of building, contents, motor vehicle and business insurance would be more than $1000 annually.