Luxury Car Tax Australia


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Luxury Car Tax Rate and Thresholds.

The Australian federal government imposed a luxury car tax on vehicles costing over a certain threshold in 2001 at a rate of 25%.

This tax increased to 33% on 1 July 2008.

In July 2021, the threshold for this tax (LCT) rose to:

$69,152 for standard vehicles.
$79,659 for ‘fuel efficient’ vehicles.

‘Fuel efficient’ vehicles in the government’s eyes are vehicles consuming less than 7L/100km on a combined cycle.

Vehicles under those prices do NOT attract the additional Luxury car tax.


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In July 2020 the thresholds were $68,740 and $77,565.

More thresholds in the chart below.

Origin of the Luxury Car Tax.

It is claimed that the tax was designed to protect the local automobile manufacturing industry.

But I appears that it is being retained as an extra tax on those better able to afford a more expensive car.

I am not sure what the most popular luxury car costs, but the most popular cars in Australia in September 2021 were:

  • Ford Ranger ($29,190 to $79,390)
  • Toyota Hilux ($23,590 to $70,750)
  • Toyota Corolla ($23,895 to $35,645)

The majority of those will be exempt from LCT.

If you buy a car with a GST-inclusive value above the LCT thresholds, you must pay LCT except in certain circumstances. In general, the LCT value of a car includes the value of any parts, accessories or attachments you supplied, or imported, at the same time as the car.

https://www.ato.gov.au/rates/luxury-car-tax-rate-and-thresholds/

Luxury Car Tax thresholds.

Financial year Fuel efficient vehicles Other vehicles
2021–22 $79,659 $69,152
2020–21 $77,565 $68,740
2019–20 $75,526 $67,525
2018–19 $75,526 $66,331
2017–18 $75,526 $65,094
2016–17 $75,526 $64,132
2015–16 $75,375 $63,184
2014–15 $75,375 $61,884
2013–14 $75,375 $60,316
2012–13 $75,375 $59,133
2011–12 $75,375 $57,466
2010–11 $75,375 $57,466

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