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Luxury Car Tax

Writer's picture: Kelly RogersKelly Rogers

The Luxury Car Tax (LCT) is an Australian tax levied on cars with a GST-inclusive value above a certain threshold.


Monopoly image of Luxury Car Tax

Threshold

The current LCT threshold is $91,387 for fuel efficient vehicles and $80,567 for other vehicles for the 2024–25 financial year. This means that the tax applies to the portion of the vehicle's value above this threshold including GST.


LCT thresholds from 2022 to 2025

Rate

The rate of LCT is 33% of the value of the car above the threshold.


Exemptions

Some vehicles are exempt from LCT, such as cars designed for transporting goods or passengers with a carrying capacity of more than 2 tonnes or more than 9 passengers, and cars that are specially modified for use by people with a disability.


Who pays the luxury car tax?

The LCT is payable by businesses or individuals who import or sell luxury cars in Australia. They collected on behalf of the purchaser, similar to when you pay GST.


Filing and Payment

Businesses that are liable to pay LCT need to register for LCT and file activity statements to report and pay the tax to the Australian Taxation Office (ATO).


Changes and Updates

The LCT threshold and other details are subject to change, so it's essential for businesses and individuals involved in the purchase, sale, or import of luxury cars to stay updated with the latest information from the ATO.


What else should you consider?

Note that LCT is not the same as the maximum amount you can claim for the purchase of a new vehicle or the maximum amount of GST you can claim on a new vehicle. Please refer to our other post about maximum car limits for more information.


References






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The information I have provided you is purely factual in nature and does not take account of your personal objectives, situation or needs. The information is objectively ascertainable and, therefore, does not constitute financial product advice. If you require personal advice you should consult an appropriately licensed or authorised financial adviser

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