Congestion Levy
What is the congestion levy?
The congestion levy is an annual charge applied to off-street parking spaces. It applies to both public and private car parks in inner Melbourne. The levy intends to reduce traffic congestion by encouraging the use of public transport.
The levy applies to defined areas of inner Melbourne being defined as category one and category two (please see State Revenue Office website for congestion levy map).
https://www.sro.vic.gov.au/vehicles-and-car-parks/congestion-levy/congestion-levy-map
What is a parking space?
A parking space is any area used for parking a vehicle or set aside for parking a vehicle, regardless of whether it is currently being used for parking or not.
A parking space does not need to be marked by permanent lines. Where an area is used or designated for parking but has no line markings, each 25.2 square metres is considered a separate parking space.
Placing a sign or temporary barrier around a space to indicate that it is not a parking space does not prove the area is not a parking space.
Who pays the congestion levy?
Who pays the levy depends on:
- Whether the car park is public or private; and
- Who owns or operates the car park on 1 January each year.
For public car parks both the owner and operator on 1 January are jointly and severally liable for the levy. In most cases the owner pays the levy.
For private car parks the owner on 1 January is responsible for payment the levy.
The owner is usually the person with freehold interest in the land and the operator is usually the entity responsible for managing a public car park, who normally has a lease from the owner.
Whoever owns or operates the car park must pay the levy for each non-exempt parking space in a levy area. The State Revenue Office calculates the levy assessment based on how parking spaces were used in the previous calendar year.
Registration of car park
You must register with the State Revenue Office (SRO) within one month of becoming the owner of a public or private car park and for public car parks, the operator must also register.
After you register the SRO will send you an annual return in November or December each year. You must complete it and send it back by 21 January the following year. The return is your declaration of the number of parking spaces you own or operate and is where you claim any exemptions or concessions that may apply.
The SRO use this information to calculate your levy and will send you your assessment in March. You can pay in full or in quarterly instalments.
Remember the onus is on the owner to ensure they register with the SRO. Just because you do not register does not mean you do not have to pay the congestion levy.
Exemptions and concessions
There are exemptions and concessions for the congestion levy where eligibility is based on ownership use and availability of spaces. Parking spaces used exclusively for residential purposes are excluded from the congestion levy. Please follow the link below to the SRO’s website to obtain the full list of exemptions and concessions.
It is important to note that the SRO audits the use of parking spaces against any claimed exemptions. An owner may be liable for unpaid congestion levy, liabilities, penalties and interest as a result of an SRO audit, even retrospectively.
Selling a car park or property with car park?
When selling land subject to the congestion levy, vendors are required to disclose the total annual congestion levy liability applicable to the land in the section 32 statement.
If you sell a car park or property with attached or associated parking spaces, you must update your details with the SRO within one month of settlement. You are responsible for the levy for the current calendar year unless the sale agreement says otherwise or the operator is already responsible for paying the levy. If you do not register, you may face penalties and back dated levies.
As the new owner of a car park, you will receive a levy assessment in the year after your purchase. This does not apply if the operator has been nominated to receive assessments.
As a vendor, do not risk the purchaser terminating the contract due to a failure to properly disclose the congestion levy in the Section 32 Statement. Likewise, as a purchaser, do not risk acquiring a property without this important information being disclosed. Contact our office to ensure that any congestion levy liability is accurately disclosed in the Section 32 Statement.
If you are selling or purchasing property that may be subject to a congestion levy or would like assistance in relation the congestion levy, please contact our office via telephone on 03 9707 1155 or via email at admin@wslegal.com.au