The Victorian Building Authority (VBA) is getting ready to change the way the building permit levy is paid and more importantly, how you get a building permit number.

Starting 1st July, the Relevant Building Surveyor (RBS) will need to request the building permit number from the VBA. But before that, the RBS must pay or nominate a party to pay the Building Permit Levy.  Until the levy is paid, the building permit number won’t be given.

These changes are part of a 3-year building industry reform program by the Victorian Government.

The government is hoping to address the following concerns:

  • Their difficulties in determining whether all building permit levy has been paid
  • Concerns over building surveyors retaining levy to use as working capital
  • Delays in the provision of information due to it currently being monthly.

What impact does this have on the industry? Let’s take a look at the current process and what is to come.

The current process

At the moment, the RBS creates the building permit number. When the permit is ready to be issued, we click the button, and a permit number is created instantly.  The permit is sent to the agent (usually the builder), owner and local council.

All building permits have an associated building permit levy, calculated at 0.128% of the total construction cost including GST. The levy is calculated and paid on the 7th day of the subsequent month to the VBA by the RBS on the client’s behalf.

The new process

We haven’t seen BAMS yet so we can’t say exactly what’s going to happen. After speaking with the VBA, our biggest question is the impact on service times for the industry. This flowchart from the VBA shows all the different stages. We’ve broken it down to three key steps.

New BAMS process
Source: Victorian Building Authority:

1. Request for a permit number

First the RBS needs to login and request the permit number. From what we’ve learnt so far, the RBS may need to enter in 65 mandatory fields of data per application. This new control mechanism ensures the VBA gets paid swiftly and receive more data.

Information provided to the RBS by the applicant must be complete and correct

There is an option for the RBS to request the number early, while still completing the assessment. But requesting too early could be a problem if an application gets cancelled but the levy has been paid.

2. Payment of the Levy

Once the application is submitted to the VBA, the applicant or the person acting on their behalf, will need to pay the levy before the permit number is provided. BAMS will email the nominated party for payment, which can be:

  • The owner
  • The authorised agent
  • The building surveyor

Fast payment of the levy will reduce the delay in obtaining a building permit number, and consequently issuing the permit. The recipient will receive a link from BAMS to pay through a secure payment gateway by credit card or BPAY.

Possible impacts:
  • The VBA has explained it may take up to 5 business days to provide the number and there is no statutory time frame.
  • Receiving the building permit number is dependent on prompt payment by the responsible party.

3. Issuing the building permit number

Once the levy is paid, the building permit number will be sent to:

  • The owner
  • The agent on their behalf
  • The building surveyor

The VBA will provide a statement that includes the amount of government levy paid, the issue date and the building permit number.

Possible impacts:
  • Just because the building permit number is issued, does not mean the building permit is actually issued. It may be more confusing, particularly for owners.

Getting ready for BAMS

This is a fundamental shift to what building surveyors do at the moment. There’s clear direction from the VBA the change will be made starting 1st July 2019. How this will effect service times isn’t clear yet. But, it’s important for the industry to prepare for any changes this might have on their business and clients such as:

  • Paying the levy upfront
  • Agents/owners different involvements at various stages
  • Potential for slower access to building permits
  • Extra administration by the RBS

As always, we will seek out the most efficient way to tackle this.

If you’d like to get advice or work with us on your next building project, feel free to contact us.