The Congestion Levy Bill 2005 was introduced into the Victorian Parliament on Wednesday 5 October 2005. The levy comes into effect on 1 January 2006 and will affect the owners and operators of car parks in the central Melbourne area.
How is the levy worked out and when does it have to be paid?
For the 2006 year, the amount of levy is $400 for each “long stay parking space” in a car park in the “levy area”. A map of the “levy area” can be found here. In 2007, this increases to $800 for each leviable car parking space. For subsequent years, the amount of the levy will be indexed each year in line with the Consumer Price Index. While all parking spaces in a private car park are “long stay parking spaces”, a parking space in a public car park is only a “long stay parking space” if:
- it is set aside or used for ongoing parking by the owner of the space or another person under an arrangement with the owner, such as a lease or a licence, or
- it is available to be used for the parking of a motor vehicle for a period of at least four hours on a working day commencing before at or before 9.30am and ending at or after 9.30am.
In the case of a public car park, the SRO is required under the legislation to assume that 75% of the parking spaces are leviable. It is possible to apply to the SRO to have the percentage varied downwards, which would reduce the amount of levy payable.
Are there any exemptions or concessions?
There are exemptions from the levy. The main exemptions are for:
- residential parking (although residential owners in the levy area still need to register)
- parking for visitors or loading or unloading goods or passengers
- parking spaces owned by local councils and charities
- parking for emergency vehicles
- parking for people attending special events
- parking for the disabled, and
- parking for shift workers and overnight parking of fleet vehicles.
Concessions are also available for parking spaces which are exempt for part of a year or which do not exist as parking spaces for the full year.
What do owners, operators and purchasers of car parks need to do now?
Once the Congestion Levy Bill becomes law on 1 January 2006, the owner and the operator of a public car park in the leviable area will need to apply to the Victorian State Revenue Office (SRO) to be registered under the legislation by 21 January 2006. The owner of a private car park in the leviable area must also register by the same date.
The congestion levy for 2006 is due to be paid by 21 January 2006 and will be based on an estimate of the number of leviable car parking spaces during calendar year 2006, with an adjustment to be made in January 2007. For 2007 and future years, the levy will be calculated on the actual number of leviable spaces during the preceding year and will be payable on 21 January each year.
The owner and operator of a public car park are jointly and severally liable to pay any congestion levy. The owner of a public car park should review existing arrangements it has with the operators of car parks in buildings owned by it to ensure that the owner can recover any levy from the operator if the need arises. Going forward, all new car park operating agreements should address the potential for the owner of a car park being required by the SRO to pay the congestion levy.
Owners of parking spaces in private car parks who allow others to use a parking space under a lease, licence or other arrangement have a statutory right to recover the levy from the user. Once the legislation becomes effective on 1 January 2006, there will only be 21 days from that date until the date when the 2006 levy is due to be paid. Owners of private car parks could however recover the levy earlier than 1 January but only where the user agrees to this.
Owners and operators of public car parks do not have any statutory rights to recover the levy from users but will instead need to adjust their casual and permanent parking fees to take the levy into account. Operators will also need to think about whether they want to set aside spaces to be used exclusively for short stay parking.
If an owner or operator of a public car park considers that less than 75% of their car parking spaces are long stay parking spaces, consideration could be given to making an application to the SRO to vary the percentage from 75% to something less. It is expected that such applications would be successful where it can be demonstrated that spaces have been set aside solely for shorter term parking or where it can be demonstrated that spaces are not “long stay parking space” according to detailed records of actual usage.
Any unpaid congestion levy is a charge on the land. Purchasers of property will need to take this into account when doing due diligence.