A drastic 73 per cent increase in the congestion levy is likely to mean motorists travelling into Melbourne's CBD will shell out more for parking.
Victoria’s state government is poised to announce an increase in the congestion levy from January 1, 2026, which is expected to push up the cost of parking in inner-city areas.
The congestion levy is aimed at disincentivising vehicle parking in built-up areas to reduce traffic concerns, and is paid annually by the owner of a private or public parking space, per spot owned.
At present, the rate is set at $1750 per space in the 'Category 1' area, and $1240 for spots in the 'Category 2' catchment, with fees often dictating parking prices that are then passed onto motorists.
For 2026, they will increase to about $3030 for Category 1 spaces, and $2150 for Category 2 spots – an increase of approximately 73 per cent across both areas.
According to the Victoria State Revenue Office: “The levy assessment is calculated based on the use of parking spaces in the preceding calendar year”, with the figure adjusted and indexed against the consumer price index each November.
This is expected to have a direct correlation with parking fees for users, as operators look to recoup the increased cost.
According to a Property Council study, which looked into commercial car park operators, drivers can be expected to pay an additional $1386 per year – but it remains unclear how often users would need to pay for parking to reach this figure.
Tung Nguyen has been in the automotive journalism industry for over a decade, cutting his teeth at various publications before finding himself at Drive in 2024. With experience in news, feature, review, and advice writing, as well as video presentation skills, Tung is a do-it-all content creator. Tung’s love of cars first started as a child watching Transformers on Saturday mornings, as well as countless hours on PlayStation’s Gran Turismo, meaning his dream car is a Nissan GT-R, with a Liberty Walk widebody kit, of course.
