Luxury Car Tax

Luxury Car Tax is a tax of 33% on the sale of motor vehicles that meet a certain set of conditions.

Luxury Car Tax applies to most new and demonstrator cars where the price, excluding government fees and charges (registration, CTP & stamp duty) and including GST exceeds the Luxury Car Tax threshold.  LCT is charged on the portion of the vehicle’s price that exceeds this threshold. The Luxury Car Tax threshold is subject to change each financial year. For the 2013-2014 financial year the threshold for regular motor vehicles is $60,316.00, and for fuel efficient motor vehicles is $75,375.00.

In other words, Luxury Car Tax doesn’t only apply to luxury cars, but rather to any car that meets certain conditions. The Luxury Car Tax rate was set at 25%. In May 2008, the then Treasurer Wayne Swan announced that the  Luxury Car Tax rate was increase by 8% (to 33%) effective from the 1st of July 2008.

Prior to this the LCT rate was 25% and LCT did not apply to certain fuel efficient cars, including cars with combined-cycle fuel consumption of less than 7L/100km, and who were sold on or after the 3rd of October 2008 whose price is less than a new, higher fuel-efficient car limit (including GST and excluding government fees and charges – stamp duty, registration & CTP)

If you are a Primary Producer or Tourism Operator you can claim a refund of the additional 8% to a maximum of $3,000 on all-wheel drive vehicles or four-wheel under certain circumstances (visit www.ato.gov.au  for further information)

When do you pay Luxury Car Tax?
Luxury Car Tax is payable on a vehicle when you purchase the vehicle from a dealership or when the vehicle is less than two years old and is calculated from the build date for locally made cars or the compliance date for imported cars.  You account for LCT when completing your activity statement for the tax period which also applies for GST.

When don’t you pay Luxury Car Tax over the LCT threshold?
When it’s a campervan or a commercial vehicle not designed to carry passengers or a vehicle transporting disabled people seated in wheelchairs.

This is a minefield of calculations & regulations and the staff at Benson leasing are experienced at helping navigate around these numbers. Read more.