FENZ levy changes from 1 July 2026: what property owners and businesses need to know

The Fire and Emergency New Zealand (FENZ) levy is an existing, mandatory charge collected through certain property‑ and motor‑related insurance policies to help fund national fire and emergency services. From 1 July 2026, changes to how this levy is applied will affect policies issued or renewed from this date. While levy rates are generally reducing, the way the levy is calculated is also changing, meaning the practical impact will vary depending on the type of asset insured, how the levy is applied, and whether the property is residential, non‑residential or mixed‑use.

What’s changing from 1 July 2026?

1. Levies are moving to a sum insured basis for commercial property

For many commercial properties, the levy will now be calculated on the full replacement sum insured, rather than a lower indemnity or depreciated value. As a result, some assets may attract a materially higher levy overall, even though the levy rate itself has reduced.

2. Different rates apply for residential vs non-residential property 

Residential and non‑residential properties will continue to attract different levy rates, however, the way those charges are applied, and limited, is now more clearly structured. 

• Residential property – pure residential, or where the residential percentage of the building’s floor area is 50% or more, will attract a lower levy rate, and
• It is still subject to a maximum levy cap per dwelling – now $107.40 per dwelling.  

What does this mean?

For purely residential buildings and residential-heavy body corporates, it means that overall levies should reduce even where sums insured are high, as the levy has reduced from $119.50 to $107.40 on a per-dwelling basis.

Commercial (non-residential) property or where the residential percentage of the building’s floor area is less than 50%, and no valuation has been provided to apportion residential and non-residential:

• Also attracts a lower levy rate, but
• There is no cap on the levy amount, and the levy will now be applied to the sum insured rather than the indemnity value, as might have been previously used.  

What does this mean?

Although the levy rate has reduced, commercial property levies remain uncapped and are calculated on the full sum insured, meaning higher‑value assets will still attract higher levies and may increase compared to previous years.

For mixed-use property it is important to note that the client can elect to provide a valuation to apportion the property value between the residential and non-residential parts of the building.

In this instance, the insurer will apportion the sum insured in the same way the valuer apportions your property in the valuation. The new levy is applied to the sum insured.

The levy would be the lesser of the following: 

1. the total of the following two amounts: 
   i. 0.1074% x sum insured, that is apportioned to the residential part of the building up to a maximum of $107.40 per dwelling, and 
   ii. 0.0776% x sum insured, that is apportioned to the non-residential part or parts of the building. 
2. 0.0776% x total sum insured.

Example: mixed‑use building with valuation apportionment:

In this example we have a body corporate building with a total value of $17.5m. There are 10 residential units at a replacement value of $750,000 each. In addition, the commercial component of the building has a replacement value of $10m. The apportionment between residential and commercial is $7.5 m and $10m respectively.  In this instance the levy will be the lesser of:

1. the residential levy calculated per dwelling, reducing the levy from $119.50 to $107.40 per unit, for a total levy of $1,074.00, plus the levy of 0.0776% on the non‑residential portion sum insured $10m = $7,760, producing a combined total levy of $8,834.
2. The total sum insured is $17.5m – at a levy rate of 0.0776% the applicable levy will be $13,580.00. 

In this example the levy will be $8,834.00 which applies because it is lower than the levy calculated on the full $17.5m sum insured.

3. Motor vehicles will move to a flat levy 

From 1 July 2026, the FENZ levy for motor vehicles will move to a single flat $25 per vehicle. Previously, motor vehicle levies varied depending on factors such as vehicle type, weight or insured value, and in some cases differed by cover structure. Under the new framework:

• The same levy applies to each vehicle, regardless of its weight, size or insured value, and
• The levy applies regardless of cover type, including vehicles insured for Third Party Only (TPO).

What does this mean?

Light vehicles will generally attract higher levies, while some heavier vehicles may see reductions. The levy outcome is now driven by vehicle type and number, not the vehicle value.

Clients, however, still need to give consideration to mobile plant equipment.  Mobile Plant Equipment that fits the definition of vehicle can be insured under the commercial motor vehicle policy and the flat levy of $25 per unit will apply.  

However, where mobile plant equipment is insured under a plant equipment or material damage policy, the new reduced levy rate of 0.0776% x sum insured will apply.

4. Levy scope expands 

What’s changing?

The range of assets subject to the FENZ levy is also being updated, with some property types being brought into scope and others instead excluded. Assets that are now exempt are boats and watercraft. Conversely, assets that were previously exempt may now attract a levy for the first time, creating new costs which may not yet be reflected in budgets or renewal expectations.

The following asset classes, will now be subject to the levy:

• Domestic aircraft
• Livestock
• Forestry
• Growing crops

What are the practical next steps you, as a business or property owner, need to take?

For commercial and mixed-use property owners:

• Review whether levies were previously calculated on indemnity values
• Stress-test levy impact at current sums insured
• Budget for possible step-changes at renewal

For vehicle and mobile plant fleets:

• Expect increases for light vehicles
• Expect savings for heavy vehicles and qualifying mobile plant
• Confirm whether mobile plant meets the Land Transport Act definition

Key takeaway 

While the changes in levy rates are important to note, the overall financial impact is now largely driven by the value the rate is applied to, and how assets are defined and classified. Reviewing your sums insured and asset definitions ahead of renewal is therefore critical.

Please see the table below for the changes. 

FENZ Levies 1 July 2026 - Commercial Property

FENZ Levies 1 July 2026 – Consumer / Residential Property 

FENZ Levies 1 July 2026 – Rural Property