What is the congestion levy?
The congestion levy aims to reduce traffic congestion in central Melbourne by encouraging motorists to use public transport more often.
Unless an exemption or concession applies, the levy is charged each calendar year on off-street private and public car parking spaces in two specified levy areas.
Where are the levy areas?
The levy areas are located within inner Melbourne and comprise a category 1 (red) area and a category 2 (blue) area, with each area attracting different levy amounts.
What is a parking space?
A parking space is an area that is:
- used for parking a vehicle, or
- set aside for parking a vehicle, regardless of whether it is being used as a parking space.
A parking space does not need to be marked out by permanent lines. Where an area is used or set aside for parking but does not have any line markings, each 25.2 square metres is considered a parking space.
Placing a sign or a temporary barrier around a space to indicate that it is not a parking space is not evidence to prove that the area is not a parking space.
Details on how to treat a space that allows for the parking of multiple vehicles are available in Revenue Ruling CL-001: Congestion levy - parking space for multiple motor vehicles.
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 that are not open to the public are considered private car parks.
Who pays the levy?
Public car parks
For a public car park, the owner and operator, as at 1 January of each assessment year, are jointly and severally liable for the levy unless an exemption or concession applies.
In most cases, the owner is the person who holds a freehold interest in the land on which the car park is situated. If the car park is situated on Crown land, the owner is the Crown. If a lease or licence has been granted over the Crown land, the owner is the lessee or licensee.
Private car parks
For a private car park, the owner as at 1 January of each assessment year is liable to pay the levy unless an exemption or concession applies.
What if I rent out a parking space?
If you own a property within the congestion levy areas and rent it and an attached parking space(s) out, you may be liable to pay the congestion levy depending on how the parking space is used by your tenant.
Similarly, if you lease your parking space separately from your commercial or residential property (for example, on online booking sites for car space rentals), you may, depending on how your lessee uses the parking space, be required to register for and pay the congestion levy.
Can I pass on the levy amount?
Yes, the cost of the levy can be passed on. This is done in different ways depending on whether you are a public car park owner or operator or a private car park owner.
Public car parks
The arrangement between the owner or operator could be such that only one party has the right to increase parking fees. Under these circumstances, the party who has the right to increase parking fees, but does not bear the responsibility of paying the levy, must indemnify the other for the levy amount.
Private car parks
Where a private car park owner allows another person to use a parking space under an agreement, for example, a lease, the person using the parking space must pay the levy amount and any respective GST to the owner. If the person is using the parking space for an exempt purpose, they are required to provide the car park owner with a completed exemption claim form.
Read more about renting out a parking space.
How much is the levy?
In 2021, the levy for each non-exempt parking space is:
- Category 1 area - $1480
- Category 2 area - $1050
Levies are indexed annually for CPI and adjusted levy amounts are published here in November each year.
The levy assessment is calculated based on the use of parking spaces in the preceding calendar year. For example, the 2021 levy assessment is calculated based on the use of parking spaces during the 2020 calendar year.
Historical levy rates
Register for the levy
Generally, you need to register 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 or operator of a car park.
Register as a car park 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 in mid-April. You can pay in full or in equal, quarterly instalments (21 June, 21 September, 21 November and 22 February).
Calculating the levy
Your annual levy is calculated on the 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 2021 assessment is based on the number of your non-exempt spaces from 1 January to 31 December 2020, multiplied by the amount of the 2021 levy for your relevant area.
Calculate your levy (public)
Calculate your levy (private)
Buying a car park or property with car spaces
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, you will be issued a levy assessment in the year following the change of ownership.
Selling a car park or property with car spaces
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.
If you sell the car park or property during an assessment year, for example 2020, you are still liable for the levy for that assessment year because you owned or operated it on 1 January 2020.
Getting it right
Our priority is to help you pay the right amount of tax at the right time. Learn more about how we do this.
Last modified: 2 August 2021