The vast majority of NSW households will be better off once a new emergency services property levy is introduced, New South Wales Treasurer Glady Berejiklian has said.

Ms Berejiklian has announced that all property owners will pay the levy from July 2017, replacing the existing system, which funds firefighters and State Emergency Services workers through a tax on insurance companies.

She said the existing system had pushed up insurance premiums and meant those who insured their properties had been unfairly subsidising those who did not.

"This is a much fairer system," she said.

"It just means that a greater proportion of the community will be funding those vital services."

The exact rate that people will pay will be worked out in the next 18 months, but Ms Berejiklian said 75 per cent of property owners would benefit.

"We would say at least around three-quarters of households will be better off under this system," Ms Berejiklian said.

"If you insure your property, you will be better off. You will be paying far less insurance, and the amount that we'll be asking people to pay for the levy on property will be less than what you are saving on your insurance.

"We're not making any more money out of this. We're doing this because it's fairer."

The Treasurer estimated that households that insured their properties would save $40 a year on average.

Professor Fels to monitor new levy

Professor Allan Fels is being appointed Emergency Services Levy Insurance Monitor to ensure the savings will be passed on to insurance premiums holders.

Ms Berejiklian said he and his deputy, Professor David Cousins, would have the power to impose penalties of up to $10 million on insurance companies that resist.

She said renters who had contents insurance would not have to pay the new levy but would also benefit from lower premiums.

Emergency Services Minister David Elliot said all property owners who benefit from emergency services should have to contribute.

"This reform is to make sure that those that are using their emergency services are paying for those emergency services," he said.

"Australians don't cop shirkers... and this reform is about making sure those shirkers are paying their fair share."

Here's how it will work: Insurance companies currently pay a tax for emergency services

Insurance companies currently pay a tax for emergency services Mike Baird says that tax pushes up premiums

Mike Baird says that tax pushes up premiums The new levy will be charged to all homeowners and the tax will be removed

The new levy will be charged to all homeowners and the tax will be removed The Government estimates premiums could drop $40 a year

The Government estimates premiums could drop $40 a year It says the levy means all homeowners contribute — not just those with insurance

Ms Berejiklian said with lower premiums more people were also likely to take up insurance for their properties.

But the NSW Opposition accused the government of springing the new levy on homeowners without warning.

Shadow Treasurer Michael Daley said NSW Premier Mike Baird advocated the levy when he was treasurer in 2012 and the issue was put out for consultation, then dropped.

He said the Government had given no indication it is resurrecting the idea.

"This is Mike Baird's new land tax for NSW, just in time for Christmas," he said.

"Parliament has just finished five months of sitting and Mike Baird did not mention this once.

"This plan was raised by Mike Baird when he was treasurer and he couldn't make the case for it then so he retreated.

"The numbers didn't add up then and the insurance companies wouldn't open their books. The devil's in the detail with this new tax and Mike Baird has not released or consulted on any of the detail."

The ABC understands the Government will introduce measures to try to ensure insurance companies pass on the savings to customers once the tax is removed, but Mr Daley said he remained unconvinced.