Car Space Lease Agreement in Australia: A Practical Guide

A car space lease agreement is a written contract between the owner of a parking space and the person renting it. In Australia it is usually a simple contract rather than a residential tenancy, which means the agreement itself does most of the work: what you write down is what applies. This guide covers what to include, the strata, state and tax rules Australian space owners run into, and a step-by-step way to put the agreement together.

The NRMA found Sydney's average all-day parking rate is US$51, about double comparable US cities, with Melbourne at US$39 and Brisbane at US$38. At those prices a private car space in an apartment building or driveway is often far cheaper for a commuter than a commercial car park, and a steady income for the owner. A clear agreement keeps it that way.

Is a Car Space Lease Covered by Tenancy Law?

Usually not, when the space is rented on its own. Residential tenancy laws in each state cover homes, and a car space leased separately from a home is generally treated as a separate contract. NSW Fair Trading's renting rules apply to residential premises, and a parking space is usually ancillary to a property rather than premises in its own right. In practice this means:

• the residential bond rules and bond lodgement do not normally apply to a stand-alone car space, so the agreement should say how any deposit is held and returned;
• notice periods are whatever the agreement says, so write them down clearly;
• if the car space is included in a residential lease for a flat, it is part of that tenancy, and the tenant usually cannot rent it to someone else without the landlord's consent.

Because the agreement carries so much weight, a vague one is hard to enforce. That is the main reason to write it properly.

What to Include in a Car Space Lease

Describe the exact space in the agreement, especially on a shared driveway or in a basement with numbered bays. Photo: Pexels

• Parties: full names, phone, email and postal address for both sides. If either side is a business, include the business name and ABN.
• The space: street address, lot or bay number, level, and any identifying marks. Note if it is undercover, tandem, or has a height limit.
• Vehicle: make, model, colour and registration.
• Term: fixed term or month to month, the start date, and the notice either party must give.
• Rent: the amount, whether it includes GST, the due date and payment method, and any late fee.
• Access: how the renter gets in (remote, fob, swipe card or code), any device deposit and replacement cost, and access hours.
• Rules: no storage, no repairs, no flammable materials, and compliance with strata by-laws, which should be attached.
• Liability and insurance: the renter parks at their own risk, keeps the car registered and insured, and pays for damage they cause.
• Disputes: talk first, then mediation, then the relevant tribunal or local court.

Our Australian parking space rental agreement form has fields for all of this, including ABN, photo ID and an alternate contact. For a general sample you can copy, see our sample parking agreement contract.

Strata By-Laws: Check Before You Advertise

In an apartment building the car space is often part of your strata lot or a lot of its own, but its use is still governed by the building's by-laws. Some schemes restrict leasing car spaces to people who do not live in the building, require the owners corporation or body corporate to be told who is using the space, or control how many remotes and fobs are issued. Read the by-laws, and if they are silent or unclear, ask the strata manager in writing before you advertise. We cover the common problems in strata parking rules in apartment buildings.

If you rent your own apartment, check your residential lease as well. Renting out the car space that comes with it usually needs the landlord's written consent.

State and Council Rules Worth Knowing

• Victoria, congestion levy: in the Melbourne levy area, the State Revenue Office says the owner of a car space rented out for non-residential use may be liable for the congestion levy. Spaces used only for residential parking are exempt. Owners can pass the cost on to the renter, so say in the agreement whether the rent includes it. See also our guide to the congestion levy for CBD residents.
• New South Wales: a stand-alone car space lease is a contract matter. Disputes that cannot be settled by agreement generally go to the local court's small claims division, or to NCAT where the car space is part of a residential tenancy.
• Councils: renting a driveway space in a residential street is rarely regulated, but councils control things like commercial vehicles parked in residential zones and signage. If you plan to rent several spaces as a business, check with your council first.

Tax on Car Space Income

Rent from a car space is income and should be declared in your tax return. You may be able to claim related costs, for example a share of strata levies or the cost of a replacement remote, but the rules depend on how the space is held, so check with the ATO or your accountant. If you are registered for GST, the rent is generally subject to GST. Keep a simple record of every payment and cost.

How to Create the Agreement, Step by Step

Photograph the space before the first day, including existing oil stains or cracks, and keep the photos with the agreement. Photo: Pexels

1. Confirm you can rent it. Check the by-laws, your mortgage or lease terms, and any council rules.
2. Start from a template. Use the Australian rental form or a printable parking space lease template with lessor and lessee fields.
3. Customise it. Add access hours, device deposits, EV charging, tandem arrangements or a shared parking schedule if they apply. Define terms like "business hours" exactly instead of leaving them open.
4. Add the practical details. Include photos of the space and a note of its condition, and say what happens during building maintenance when the garage is closed.
5. Review together. Both parties read the final version and raise any questions before signing.
6. Sign and share. Both sign and date the same version, and each keeps a complete copy, printed or digital.
7. Set reminders. Put rent due dates, the deposit return deadline and a renewal discussion 30 days before any end date in your calendar.

Examples: Where Agreements Break Down

Most disputes over car spaces in Australian buildings follow a few patterns. These examples show the clause that would have prevented each one.

• The annual garage clean. A building closes its basement for two weeks of maintenance, and the renter cannot park. With no clause about access interruptions, the renter wants a refund and the owner says the rent is due. The fix is a clause setting notice for planned closures and a pro rata rent reduction when the space is unavailable for more than a few days.
• The owner who could not rent it. An apartment owner advertises a second car space and finds a renter, then learns the by-laws require approval for non-resident users. The arrangement has to stop. The fix is to check the by-laws before advertising and to get approval in writing.
• The return to the office. Demand for CBD car spaces rises when workers return to offices, and a renter on a handshake arrangement faces a sudden rent rise. A fixed term, or a month-to-month agreement with a set notice period for any increase, gives both sides time to plan.

Managing the Rental

Keep the agreement, photos, payment records and messages in one folder. Bank transfer with a fixed reference is the simplest way to take rent. Deal with small problems in writing as soon as they arise, and review the rent and terms once a year. If something does go wrong, our parking dispute help guide lists the steps and the tribunals in each state.

Covered and secure car spaces rent for more, so say exactly what the renter is getting in the agreement. Photo: Pexels

Ready to rent out a space or find one? Here is how to list your car space, and for the details of an ongoing monthly rental, see how to write a month-to-month parking rental agreement.