Understanding the congestion levy

Learn which car parks the levy covers, who pays and how much.

Key information

The congestion levy is an annual charge on off-street parking spaces in inner Melbourne.

Whoever owns or operates the car park on 1 January each year is responsible for paying the levy.

It applies to both public and private car parks in specified levy areas.

The levy aims to reduce traffic congestion in central Melbourne by encouraging people to use public transport.

The levy applies in defined areas of inner Melbourne:

category 1 (red zone)
category 2 (blue zone).

From 1 January 2026 category 2 will extend to cover:

Abbotsford
Burnley
Cremorne
Prahran
Richmond (parts of the suburb, excluding the area around Victoria Gardens Shopping Centre)
South Yarra
Windsor.

The extended area includes Chapel Street, Bridge Road, Swan Street, Victoria Street, Hoddle Street and Punt Road.

Additionally, the Queen Victoria Market will move from the category 1 area to the category 2 area and the lower rate will apply from the 2026 levy year.

These areas are shown on the congestion levy map.

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 temporary barrier around a space to indicate that it is not a parking space does not prove 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.

Car park owners and operators

Who pays the levy depends on:

whether the car park is public or private
who owns or operates the car park on 1 January each year.

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. The owner is usually the person with freehold interest in the land. If the car park is on Crown land, the Crown is the owner unless a lease or licence has been granted. In that case, the lessee or licensee is considered the owner.

The levy can be passed on. If either the owner or operator is permitted to increase parking fees but is not responsible for paying the levy, they are required to reimburse the other party for the levy amount.

Private car parks

The owner on 1 January is responsible for paying the levy.

If the owner allows someone else to use the space under an agreement, that person may need to pay the levy to the owner. If the space is used for an exempt purpose, the user must give the owner a completed exemption claim form.

If you rent out a parking space, you may still need to pay the levy depending on how the space is used. This includes leasing a space separately from your property or listing it on a car space rental site.

Exemptions and concessions

Some parking spaces may not attract the levy or may qualify for a reduced amount. Eligibility for exemptions and concessions depends on who owns the land and how the parking spaces are used.

From 1 January 2026, spaces used exclusively for residential purposes (including a temporary stay in a hotel, serviced apartment or club that provides accommodation) are no longer subject to congestion levy.

For full details and eligibility criteria, visit congestion levy exemptions and concessions.

Rates and calculations

You pay the levy for each non-exempt parking space in a levy area. Rates change each year based on the consumer price index. We calculate your levy assessment based on how parking spaces were used in the previous calendar year.

For 2025 (based on the use of the spaces in 2024):

category 1 area: $1,750 per space
category 2 area: $1,240 per space.

For 2026 (based on the use of the spaces in 2025):

category 1 area: $3,030 per space
category 2 area: $2,150 per space.

To work out the amount, multiply the number of spaces by the rate for your area. Exemptions and concessions reduce what you pay.

See our examples of levy calculations for public car parks and private car parks.

Register and lodge returns

You must register within one month of becoming the owner of a public or private car park.

If you own a private car park or own or operate a public car park in the extended category 2 area on 1 January 2026, register it by 21 January 2026.

For public car parks, the operator must also register. The owner can use the registration form to nominate the operator to manage the levy and receive all correspondence.

After you register, we 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.

We use this information to calculate your levy. We send your assessment in March. You can pay in full or in quarterly instalments on 21 June, 21 September, 21 November and 22 February.

Changes in ownership

The levy is based on who owns or operates the car park on 1 January each year.

If you sell a car park or property with attached or associated parking spaces, you must update your details with us within one month of settlement. You are responsible for the levy for the current calendar year unless:

the sale agreement says otherwise
the operator is already responsible for paying the levy.

As the new owner of a car park, you will receive a levy assessment in the year after you purchase. This does not apply if the operator has been nominated to receive assessments.