In June 2015 we advised that the introduction of the Metropolitan Planning Levy represented a substantial new tax on the planning application process for developments valued over $1 million.
The fee is to be calculated based on the ‘estimated cost of development for which the permit is required’.
Since that time a question has been raised regarding the calculation of the levy, and in particular whether the whole cost of the development is to be included or only those aspects which require planning permission.
This has particular relevance to applications for planning permits to subdivide land where the cost of the development is limited to the administrative aspects of the subdivision process, with no permission necessary in most cases for physical works (e.g. construction of roads, installation of hydraulic infrastructure) on the land the subject of the application.
Some Councils, DELWP and the SRO were taking the view that for subdivisions it was the full cost of the construction of the subdivision that should be used as the basis of the levy.
In September 2015 we advised the Urban Development Institute of Australia that the levy should be calculated only on the value of those aspects of the development which require planning approval. This advice was distributed to the UDIA’s member database and became the basis of a submission to DELWP and the SRO on this matter. We were successful!
New practice note clarifies position
On 12 May 2015 the Minister for Planning approved a practice note adopting our position in relation to calculation of the Metropolitan Planning Levy.
It is now clarified that the levy is calculated only on those aspects of the development which require planning permission.
The value of those aspects of a development which do not require planning permission is not to be included in the calculation of the levy.
Refund of overpaid levy
In June 2015 we advised that the only reason a refund might be given under the new levy arrangements would be in the case of a mathematical mistake.
The new practice note indicates that the inclusion of all works, even those not requiring planning permission, is to be regarded as a mistake and a refund in any overpayment can be applied for.
Therefore a refund is available from the State Revenue Office in respect of those applications for which the levy was overpaid.
Ongoing concerns
Several of our clients have approached us with concerns regarding circumstances where a certificate of payment has expired and the client is required to pay another levy before submitting a further planning application to the Responsible Authority.
This might arise in two situations:
- Where the Responsible Authority lapses a permit application; and
- Where an appeal by the permit applicant to the Victorian Civil and Administrative Tribunal is unsuccessful.
Both these situations require the payment of a new levy before the Responsible Authority may consider a fresh application for a planning permit, even for a near identical development.
This continues to be a concern and we are continuing to work with our clients and industry bodies to advocate that this tax on the planning application process is paid only once in respect of development proposals that are essentially the same.
Should you require any assistance applying for a refund or would like any further clarification on the Metropolitan Planning Levy please contact us.
To view the new practice note regarding applying the Planning Levy please click here.
This article was written by Mark Bartley, Partner and Alex Gelber, Solicitor.