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- In an inquiry report into Australia’s Automotive Manufacturing Industry, it’s explained the LCT was “designed to maintain this higher rate of taxation, so that the price of luxury cars did not fall dramatically”. While protecting Australia’s local manufacturing industry was a likely motivation behind this, since the demise of the Australian car manufacturing industry there have been renewed calls from industry for the tax to be scrapped. According to the AADA, the LCT applies to some of Australia’s safest vehicles, so might discourage consumers from purchasing cars with additional safety features. - Source: Internet
- The ATO states luxury car tax is only applied to eligible vehicles under two years old, starting from the date they were either imported into Australia or manufactured here. If the car is sold for a second time within those first two years, it will only attract LCT if it has increased in value. Given most cars depreciate over time, this is a possible but unlikely scenario. This means that if your car hasn’t increased in value and you can prove the LCT was already paid on it, you may be able to avoid paying the LCT even if it is less than two years old. - Source: Internet
- The luxury car tax (LCT) threshold has changed over time, with the thresholds for both fuel-efficient vehicles and other vehicles increasing for both the 2021/22 and 2022/23 financial years. The fuel-efficient threshold is due to rise by more than $5,000 for the 2022/23 financial year, which Drive has described as a “financial windfall to buyers of expensive electric or fuel-efficient luxury cars”. The base pricing for several popular electric vehicle models such as the Tesla Model 3 Standard Range Plus, Nissan Leaf and Leaf e-Plus, Hyundai Kona Electric, Kia Niro, and Hyundai Ioniq has been reported at below the newer threshold limit (due to be introduced from 1 July 2022) at the time of writing. - Source: Internet
- The luxury car tax (LCT) is a tax on cars with a total value above a threshold set by the ATO. It applies to sales of cars that are two years old or less, meaning they were either imported into Australia or manufactured here less than two years ago. A car’s value is determined by its retail price, including GST and any customs duty, dealer delivery charges, standard and statutory warranties, and the costs of extra items (such as modifications) applied to the car before delivery. - Source: Internet
- Luxury car tax is paid by dealerships that sell or import luxury cars, and also by individuals who import luxury cars, the ATO says. Dealers will generally pass on the cost of the tax to the buyer and include it in the total purchase price of any vehicle it applies to. A ‘luxury car’ is one that meets the ATO’s definition discussed above, so it isn’t just sports cars or high-performance vehicles that are affected. - Source: Internet
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