Stamp Duty on Car Insurance

Find out what stamp duty on car insurance is and how it works through Savvy’s helpful guide.

Written by 
Savvy Editorial Team
Savvy's content writing team are professionals with a wide and diverse range of industry experience and topic knowledge. We write across a broad spectrum of finance-related topics to provide our readers with informative resources to help them learn more about a certain area or enable them to decide on which product is best for their needs with careful comparison. Meet the team behind the operation here. Visit our authors page to meet Savvy's expert writing team, committed to delivering informative and engaging content to help you make informed financial decisions.
Our authors
, updated on February 15th, 2024       

Fact checked

At Savvy, we are committed to providing accurate information. Our content undergoes a rigorous process of fact-checking before it is published. Learn more about our editorial policy.

Car Insurance Banner - Happy couple driving an open-top red car.

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.

What is stamp duty on car insurance?

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

How is stamp duty calculated on car insurance?

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.

Why do I have to pay stamp duty on my car insurance policy in Australia?

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.

Are there any exemptions or discounts for stamp duty on car insurance?

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:

  • Workers compensation insurance
  • Livestock and crops which are grown or harvested
  • Physical hulls of commercial floating vessels
  • Machinery designed and used for agricultural purposes

More questions about stamp duty on car insurance answered

Can I pay stamp duty separately from my car insurance premium?

Because stamp duty on car insurance is included in your premium in most cases, it cannot be paid separately. The insurance provider collects the stamp duty amount directly via the premium and remits it to the relevant state or territory government. Therefore, it generally isn’t possible to separate the stamp duty payment from the insurance premium.

Is stamp duty refundable if I cancel my car insurance policy?

Stamp duty on car insurance is non-refundable in most cases if you cancel your policy. Once the stamp duty has been paid by your insurer, it’s usually considered a non-refundable government tax. Even if you cancel your car insurance before the policy term ends, the stamp duty portion is typically not refunded to your insurer.

Do I have to pay stamp duty every time I renew my car insurance?

Stamp duty on car insurance is generally payable when you purchase a new policy or renew an existing one. Therefore, your insurer will have to pay stamp duty each time you renew your car insurance, meaning you’ll likely be liable to cover this cost each year through your premiums.

Helpful guides on car insurance

Car Insurance Banner - Couple signing their car purchase and cover note contract at a dealership.

Cover Note Car Insurance

Find out how cover note car insurance worked and what your alternatives are to this type of cover today with...

Car Insurance Banner - An exterior view of cars driving on a highway.

Unregistered Car Insurance

Find out whether you can cover your unregistered vehicle through Savvy’s informative guide today. Are you looking for insurance coverage...

Car Insurance Banner - Man sitting at home on his laptop holding his credit card to renew his car insurance.

Car Insurance Renewal

Find out about the process of renewing your car insurance and what to consider in Savvy’s handy guide. Are you...

Car Insurance Banner - Smiling young woman giving her friend a lift after buying car insurance.

How Much is Car Insurance?

Find out about what influences car insurance premiums and how you could keep costs down. Car insurance is an important...

Car Insurance Banner - Couple driving in an open-top car, happy about receiving a no-claim bonus on their car insurance.

No-Claim Bonus in Car Insurance

Find out more about no-claim bonuses and how they can benefit your car insurance policy right here with Savvy. Looking...

Compare car insurance policies with Compare the Market

Savvy is partnered with Compare the Market to help you compare a range of car insurance policies from a panel of trusted providers.

Explore car insurance options by make

Select your car make and find out how much it may cost to insure, read helpful guides and compare quotes.


Savvy (ABN 78 660 493 194, ACR 541 339) provides readers with a variety of car insurance policies to compare. Savvy earns a commission from our partnered insurers each time a customer buys a car insurance policy via our website. All purchases are conducted via our partners’ websites. The integrity of our comparison service is unaffected by our partnerships with those businesses and our effort remains to bring further brands that do not already use our comparison service onboard.

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.

Car Insurance Banner - Happy couple driving an open-top red car.

We'd love to chat, how can we help?

By clicking "Submit", you agree to be contacted by a Savvy Agency Owner and to receive communications from Savvy which you can unsubscribe from at any time. Read our Privacy Policy.