Congestion Levy, Adjustments and Section 32 Statements

Note: This article was first published in 2013 and most recently updated in 2021

This article covers the Congestion Levy Act 2005 (Vic) and how it relates to the preparation of Section 32 statements and adjustments.

The Congestion Levy Act 2005 (Vic) (‘the Act’) commenced on 1 January 2006. The main purpose of this Act is to impose a levy on off street parking used for commercial gain and located in the Central Business District and inner Melbourne. There are a number of exemptions such as the use of a car space by a resident to park their car in the building where they reside.

The levy is a charge over the land. See s.19 of the Act. This means the levy is caught by section 32(2)(aa) of the Sale of Land Act 1962 (Vic) and must be disclosed by a vendor in the Section 32 Statement. Practitioners should obtain from their vendor clients a copy of the levy notice issued by the State Revenue Office as it is not possible to obtain a congestion levy certificate from the SRO directly. Details of the levy should be included in the outgoings and statutory charges section of a Section 32 Statement.

Ask your vendor client whether or not the levy has been paid. Where payment has been made, obtain evidence from your client and notify the purchaser’s representative to ensure the correct adjustment is made for settlement purposes. General condition 23 of the August 2019 version of the standard Law Institute of Victoria contract of sale of real estate, relevantly provides that “…all periodic outgoings…..in respect of the property must be apportioned between the parties…..”. Because the levy is payable annually, like land tax, the congestion levy can be classified as a periodic outgoing for the purpose of general condition 23.1 and should be adjusted at settlement. If you are using a different contract you should check the apportionment condition.

Further details about the levy can be found on the State Revenue Office website.