Melbourne CBD’s Congestion Levy Tax – What is it and when does it apply?
MELBOURNE CBD’S CONGESTION LEVY TAX
WHAT IS IT AND WHEN DOES IT APPLY?
What is the congestion levy?
This annual levy aims to reduce traffic congestion in central Melbourne and encourage more motorists to regularly use the city’s trams, buses and trains.
Introduced in 2005, the congestion levy is charged each calendar year to off-street private and public car parking spaces in two specified areas.
Some exemptions and concessions apply, such as for residential and disabled parking, and spaces provided free of charge for visitors and patients.
Congestion levy exemptions and concessions
A parking space may be exempt if it is either:
Owned by a specific class of owner; and/or
Used for a particular purpose.
If a parking space is only exempt for part of the calendar year, you may be able to apply for a concession to reduce the congestion levy otherwise payable on the parking space.
Claim an exemption
You can claim a congestion levy exemption in your annual return which we mail out to you in November each year.
If you own or operate a car park, and a person who occupies parking spaces in your car park wishes to claim an exemption from the congestion levy, you should ask them to fill out the CGL Form 1 Exemption Claim Form and return it to you, so you may claim an exemption on their behalf in your annual return.
If an occupant of your car park has already provided you with a written claim for exemption, confirming that the relevant exemption criteria are satisfied, there is no need to ask the occupant to complete the exemption claim form as well. Details of the exemptions and the criteria which need to be satisfied are set out below.
The exemption claim can only be received from the car park owner (for private car parks) or the owner/operator (for public car parks). You must retain completed forms and other written records for any exemption claimed. These must be provided to us on request to substantiate any exemptions that you have claim.
If an exemption only applies for part of the year, you need to complete the CGL Form 5 Concession Claim Form and mail it to us with your annual return.
Residential parking – Section 16(1) of the Congestion Levy Act (“the Act”)
A car parking space used by a resident to park their car while they are at home is exempt.
The exemption applies whether the parking space is owned by the resident or leased. A resident who leases a parking space needs to ask the owner of the parking space to claim an exemption on their behalf.
The exemption does not apply if a resident leases their parking space to a daily commuter who commutes to the CBD or for another non-residential purpose.
Guest parking at hotels, apartments or similar – Section 16(2) of the Act
If parking is provided by a hotel, serviced apartment or club guests in conjunction with their accommodation, the parking spaces are treated as being for residential purposes and are exempt.
The exemption only applies to parking spaces used by overnight guests. If a parking space is used by people who are not staying overnight, such as conference attendees, the exemption does not apply.
Parking for maintenance services and loading bays – Section 17 of the Act
A parking space is exempt if it is provided free of charge and used by a person who is:
s.17(1)(b) – Providing maintenance services to the owner or occupier of the premises on which the parking space is located; or
s.17(1)(d) – Engaged in the loading or unloading of goods or passengers.
Visitor parking – Section 17 of the Act
A parking space is exempt if it is used by:
s.17(1)(a) – Clients, patients or consultants of the person who provides the parking space (whether that is the owner of the space or a person who controls the parking space under an agreement with the owner); or
The exemption does not apply if the person providing the parking space charges visitors a fee for parking in the space.
For example, a medical practice has designated parking spaces for the exclusive use of visitors and patients of the medical practice and the parking spaces are made available free of charge. If staff of the medical practice or visitors of nearby businesses use these parking spaces, the visitor parking exemption will not apply.
Hospital visitor parking – Section 17(2)(a)&(b) of the Act
This exemption only applies to parking spaces that are owned by or leased to a hospital that are used for the parking of a motor vehicle by hospital patients and their visitors. The exemption will apply even where a fee is charged for parking in the space.
This exemption will not apply to parking spaces used by employees of a hospital, although other exemptions may apply.
Parking spaces owned by particular organisations – Section 18 of the Act
A parking space is exempt if it is owned by one of the following types of organisations:
Charitable or public benevolent institutions
The exemption does not apply if a fee is charged for parking in the space.
Parking spaces owned by consulates and consular employees – Section 18A of the Act
A parking space is exempt if it is owned by a consulate, a consular officer, a consular employee or a family member who resides in the same house with that person.
Parking for emergency vehicles – Section 19 of the Act
A parking space is exempt if it is set aside or used exclusively for parking:
Fire service units
State Emergency Service (SES) units
Australian Defence Force vehicles, while members are on march or duty
Vehicles being used for emergency services under authority of an Act or the State
The parking space can be provided by any person or organisation. For example, a major sports venue may set aside parking spaces for the exclusive use of police vehicles.
The vehicles must be registered in the name of the emergency service for an exemption to apply. The exemption does not apply to vehicles owned by employees of an emergency service. The exemption does not apply if a fee is charged for parking in the space.
Disabled parking – Section 21 of the Act
A parking space is exempt if it is set aside or used exclusively for parking by persons displaying a disabled person’s parking authority in their vehicle. The parking permit must be issued under clause 2 of Schedule 11 to the Local Government Act 1989 or clause 3 of Schedule 4 to the Road Management Act 2004.
Parking for shift workers – Section 22 of the Act
The exemption for shift workers applies to parking spaces used by employees of a business that operates 24 hours a day on weekdays.
Where only part of a business operates 24 hours a day, in order for the exemption to apply, the parking spaces must be used solely by employees who work in that part of the business that operates 24 hours a day.
For example, a bank may have an IT department and a foreign exchange desk, both of which operate 24 hours a day. While the bank’s overall business is not a 24-hour operation, parking spaces used exclusively by employees of the IT department and the foreign exchange desk would qualify for the exemption. However, parking spaces would not be exempt if used by banking staff who work in other areas of the organisation that do not operate 24 hours a day.
The parking space must only be used by employees for the purpose of attending work of the business which operates 24 hours a day and not for any other purpose.
Parking for fleet vehicles – Section 23 of the Act
A parking space is exempt if it is used for overnight parking of fleet vehicles.
Fleet vehicles are vehicles provided by an employer that are made available for staff or members of an organisation and are used in the normal operations of a business. It is possible for an organisation to have a single fleet vehicle.
Fleet vehicles do not include cars which are assigned to individuals as their personal vehicles. However, the exemption will still apply to a parking space used to park a fleet vehicle which is occasionally taken home by an employee.
Bus layovers – Section 23 of the Act
A parking space is exempt if it is used exclusively for parking passenger buses while they are not in service.
Car sales display spaces, car service spaces or car hire spaces – Section 24 of the Act
A parking space is exempt if it is used exclusively for displaying or storing vehicles on the premises which are for sale or hire. The exemption does not apply to parking spaces used by employees of the car sales or car hire business for parking of personal vehicles while they are at work.
A parking space is also exempt if it is used exclusively for parking vehicles which are being serviced or repaired on the premises, or on adjoining premises. The exemption does not apply to parking spaces which are used by employees of the car servicing business for parking of personal vehicles while they are at work.
Levy is a charge on the land – Section 32 of the Act
An unpaid levy is a charge on the land on which the leviable parking space in respect of which the levy is payable is or was situated.
What is a parking space?
A parking space is an area used or set aside for parking a vehicle, including areas not marked by parking lines. Where an area is used or set aside for parking but does not have defined parking spaces marked, each 25.2m2 is considered a parking space.
A parking space continues to exist notwithstanding that a sign or temporary barrier indicates the parking space is not a parking space.
Public car parks and private car parks
For levy purposes, a public car park predominantly provides parking spaces for use by the public. All other car parks are considered to be private car parks (i.e. not open to the public).
Who pays the levy?
For public car parks, the owner and the operator of the public car park are jointly and severally liable to pay the levy. For private car parks, the owner of premises pays the levy.
Ownership is determined as at 01 January of each assessment year.
Do you rent out your property?
If you own a property in the congestion levy area (such as a residential apartment), and you rent out this property, how the car park is used in this agreement may determine whether you are liable to pay the congestion levy.
Rent out a car space
If you own a car space which you are renting out, you may be required to pay the congestion levy. This will depend on how the car space is ultimately used.
Letting others use your car space
If the car space is used for a non-exempt purpose (e.g. the person using the car space parks the car while at work in the CBD) you must register for, and pay, the congestion levy. This is the case whether you rent out the car space directly or through an online home-based car parking listing website.
If the car space is used exclusively for an exempt purpose (e.g. you make the car space available for a fee to someone who lives in the same building and uses the space for residential purposes), then you are not required to pay the congestion levy.
Combination of both
The congestion levy applies if the car space is used for both exempt and non-exempt purposes. This means that if you use your car space for residential purposes during weekends, but you make it available for a fee to someone who uses the space while they are at work from Mondays to Fridays, the congestion levy would still apply. You may qualify for a part-year concession, however, depending on whether the car space is in a private or public car park.
If a car space is located in a private car park, a part-year concession is only available if it is used for an exempt purpose for more than 30 days in a calendar year. If it is located in a public car park, the part-year concession is available even if the space is used for an exempt purpose for only one day.
Passing on the levy
If the levy applies to the car space that you are leasing out, the cost of the levy may be incorporated into the fee that you charge, so that it ultimately is passed on to the end-user of the car space.
Sub-letting a car space
If you are sub-letting out your car space for a non-exempt purpose, the owner of the car space will be liable to pay the congestion levy. The owner may, however, request compensation for the cost of the levy from you.
For example, if you are a tenant of a residential apartment or office space and you rent out the attached car space to a CBD commuter, your landlord (as owner of the car space) will have to pay the congestion levy. However, your landlord may be entitled to ask for compensation for the cost of the levy. You may, in turn, incorporate the cost of the levy into the fee that you charge the end user of the car space.
Online booking sites to rent out car spaces
Depending on how your car space in your apartment building or home is ultimately used (you rent it out on weekends, or Mondays to Fridays), you may be required to register for, and pay, the congestion levy.
How much is the levy?
For the category 1 area, the levy for each non-exempt parking space is $1,360.00 for 2016.
For the category 2 area, the levy for each non-exempt parking space is $960.00 for 2016.
The levies are indexed annually for CPI. Adjusted levy amounts are released on this website in November each year.
Register for the levy
Generally, you need to register with us every time you become the owner of a public or private car park.
For public car parks, the operator must register in addition to the owner. The owner can, on their registration form, nominate the operator to lodge the annual returns and receive all correspondence and assessments on their behalf.
You must register within one month of becoming an owner and/or operator.
Register as a category 1 owner
Register as a category 1 public operator
Register as a category 2 owner or operator
What is an annual return and assessment?
An annual return is your declaration of the number of parking spaces within the car park that you own or operate and how you claim an exemption or concession.
After registering, you will receive an annual return from us each November. You must complete the return and send it back to us by 21 January the following year.
We use this information to calculate your assessment, which is sent out in mid-March. You can pay in full or in equal, quarterly instalments (April 21, July 221, October 21 and January 21).
For owners and operators of parking spaces in the category 2 levy area, the 2015 registration form has incorporated the annual return for 2015.
Calculating the levy
Your annual levy is calculated on the actual number of non-exempt parking spaces in your car park in the previous calendar year multiplied by the levy amount per parking space for the current calendar year. For example, a 2016 assessment is based on the number of your actual, non-exempt spaces from 01 January to 31 December 2015, multiplied by the amount of the 2016 levy for your relevant area.
Can you pass on the cost of the levy?
If you own a parking space and do not use it personally, you may pass on the cost of the levy to the person using the parking space.
If the parking space is used for an exempt purpose by another person, ask them to complete the exemption claim form and return it to you so you can claim the benefit on their behalf in your annual return. You do not need to send that form into us a part of your annual return, but you do need to retain it as we may ask to see it.
Buying a premises or property with car space/s
If you buy a car park or a property to which parking spaces are attached, or associated, you need to register for the levy within one month of settlement.
As the new owner of the car park, a levy assessment will be issued to you in the year following the change of ownership.
Selling a premises or property with car space/s
If you sell a car park or a property to which parking spaces are attached or associated, you need to change your details with us within one month of settlement.
Please note that if you sell the premises during an assessment year (for example, 2017), you are still liable for the levy for that assessment year because you owned or operated the premises to which parking spaces are attached or associated on 01 January 2017.
This article is intended only to provide a summary of the subject matter covered. It does not purport to be comprehensive or to render legal advice. No reader should act on the basis of any matter contained in this article without first obtaining specific professional advice.
For any further information concerning this article, please contact Michael Pickering, Principal, Judicate Lawyers – Barristers and Solicitors of Unit 11 / 233 Cardigan Street, Carlton, Victoria, 3053. His contact details are as follows: