What is the congestion levy?
This annual levy aims to reduce traffic congestion in central Melbourne by encouraging more motorists to regularly use public transport.
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.
Where are the levy areas?
There are two levy areas attracting different levy amounts. Category 1 (red) and category 2 (blue) are mapped and described here. The category 2 levy area became effective from 1 January 2015.
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 defined parking spaces marked out, each 25.2sq/m 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, by itself, sufficient evidence that the area is not a parking space.
For details on how to treat a space that allows for the parking of multiple vehicles, please refer to 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 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 1 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.
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?
- Category 1 area - the levy for each non-exempt parking space is $1480 in 2021.
- Category 2 area - the levy for each non-exempt parking space is $1050 in 2021.
Levies are indexed annually for CPI. Adjusted levy amounts are published here in November each year.
Past levy rates
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 January 21 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 21, October 21 and January 21).
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 2021 assessment is based on the number of your actual, 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)
Part-year levy concessions
You may apply for a concession to reduce the levy on a private or public parking space if it did not exist as a parking space, or was exempt, for part of a calendar year. Your application should be submitted with your annual return.
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, 2020), 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 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: 11 February 2021