Most metropolitan Melbourne councils are by now aware that from 1 July 2015, a ‘leviable planning permit application’ which is not accompanied by a current ‘levy certificate’ is void.

A leviable planning permit application is an application under s 47 or s 96A of the Planning and Environment Act 1987 for the development of land in metropolitan Melbourne if the estimated cost of the development for which a permit is required exceeds the ‘threshold amount’.

For the financial year commencing 1 July 2015, the threshold amount is $1 million. The threshold amount will be adjusted in accordance with a CPI calculation on 1 July 2016 (and presumably every July thereafter).

A levy certificate will only be issued if the Commissioner of State Revenue is satisfied that the whole of the Metropolitan Planning Levy has been paid in respect of the estimated cost of the development.

Below we answer the most frequent questions that councils are asking where they are the responsible authority (s 47) or planning authority (s 96A) for the planning scheme.

Where did the Metropolitan Planning Levy come from and how is it being applied?

The Metropolitan Planning Levy is a product of the Building a Better Victoria (State Tax and Other Legislation Amendment) Act 2014 (Act).

Among other things, that Act amended the Planning and Environment Act 1987 so as to give legislative force to the levy.

The Act was passed in 2014 but, so far as the amendments to the Planning and Environment Act are concerned, does not come into operation until 1 July 2015.

Is the council expected to be the collection agency for the levy?

No. The Metropolitan Planning Levy is payable to the State government via the Commissioner of State Revenue.

Is the council expected to check that the permit applicant has given an accurate estimate of development cost?

No. Before a person makes a leviable planning permit application, he or she must give notice to the Commissioner. The notice must state the estimated cost of the development and pay the levy on that amount.

The leviable planning permit application must also state the estimated cost of the development.

It does not fall on the council to assess the accuracy of the estimate. It falls on the council to be satisfied that the current levy certificate states an estimated cost of development that is equal to or greater than the estimated cost of the development stated in the permit application.

What if the permit application is not accompanied by a current levy certificate?

The permit application is void. The responsible authority is not obliged to, and is arguably prohibited from, processing the application.

We recommend that the application be returned to the permit applicant with an explanation as to the reason.

What if the estimated cost of development on the levy certificate is less than the estimated cost of the development stated on the permit application?

The permit application is void. We recommend that the application be returned to the permit applicant with an explanation as to the reason.

What if the estimated cost of the development on the levy certificate is greater than the estimated cost on the application for permit?

This would be a valid levy certificate. A permit applicant receives no refund of the levy if the estimated cost of the development decreases after the levy certificate is issued.

For how long is a levy certificate current?

A levy certificate expires 90 days after the day on which it is issued.

The Act makes provision for the Commissioner to issue revised levy certificates. A revised levy certificate expires 90 days after the day on which it is issued.

What if the levy certificate or revised levy certificate was issued more than 90 days prior to the permit application?

The permit application is void. We recommend that the application be returned to the permit applicant with an explanation as to the reason.

What if the permit application is subsequently amended?

The Act does not say what the responsible authority is required to do in such circumstances.

The statutory obligation is upon the permit applicant to obtain a revised levy certificate if the estimated cost of the development increases after the applicant has paid the levy.

While there is no statutory obligation to do so, the council would be wise to ask the permit applicant to confirm that the estimated cost of the development is not increased by the amended application.

What municipal districts comprise metropolitan Melbourne?

The current metropolitan Melbourne municipalities are those listed in Schedule 2 of the Act as well as Mitchell Shire municipality.

Does the Act apply to applications to amend a planning permit?

No. The Metropolitan Planning Levy is not payable on an application to amend a planning permit under s 72 of thePlanning and Environment Act. This appears to be the case even if the estimated cost of the development is increased by the development.

What is the council required to do with the levy certificate?

The council is required to keep the levy certificate for a minimum of five years after the levy certificate is given to it.

Is a council required to pay the Metropolitan Planning Levy if it is an applicant in a leviable planning permit application?

It would seem so. The Act is said to apply to s 96 permit applications.