Luxury Car Tax Threshold Increase Financial Year 2022- 2023

ELECTRIC AND FUEL-EFFICIENT CARS GET A WIN

15 June 2022

Changes to the Luxury Car Tax will see buyers of expensive zero-emissions & fuel efficient pay less tax from 1st July 2022.

• LCT threshold for most vehicles increases to $71,849 from 1st July 2022 (up from $69,152)

• LCT threshold for fuel-efficient & zero-emission vehicles increase to $84,916 (up from $79,659)

• LCT rate of 33 per cent to $71,849 is applied to each dollar above these thresholds

The luxury car tax threshold will rise by 6.6% for fuel-efficient vehicles and 3.9% for other vehicles that are imported, acquired, or sold in the 2022-23 financial year (FY), as compared to the previous financial year’s threshold.

According to the Australian Taxation Office (ATO), the luxury car tax threshold for FY 2022-23 is $84,916* and $71,849 for fuel-efficient vehicles and other vehicles respectively.

The luxury car tax threshold is indexed on 1 July each year and is based on any increases in the motor vehicle purchase sub-group of the consumer price index (CPI). 

According to the ATO, a fuel-efficient vehicle is one that “has a fuel consumption that does not exceed seven litres per 100 kilometres as a combined rating.”

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Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice.