Australia’s controversial luxury car tax threshold has been moved higher for the 2023-2024 financial year, meaning more models will be exempt from the tariff even though many marques are steadily marching upmarket.
From July 1, 2023, the LCT threshold will be lifted from $71,849 to $76,950 – raising the cap by $5101.
This means vehicles like the recently revealed Ford Everest Wildtrak (from $73,090 before on-road costs), the petrol-powered Hyundai Palisade Highlander (from $75,900) and Toyota’s ageing LandCruiser 70 Series GXL SUV (from $75,100) no longer run afoul of the LCT ceiling.
And for fuel-efficient vehicles (vehicles with fuel economy numbers below 7.0 litres per 100km) and electric vehicles (EVs), the cap has also been lifted, moving $4416 from $84,916 to $89,332.
This means buyers of electric cars like the Kia EV6 GT-Line AWD ($87,590) and Hyundai Ioniq 5 Epiq ($85,000) and the Tesla Model 3 Performance ($89,100) are now excluded from paying LCT.
Keep in mind, the federal government has also introduced an Electric Car Discount Bill that makes EVs below the LCT threshold exempt from fringe benefits and import taxes.
Some state governments also incentive EVs with a rebate, tax exemptions and registration discounts, while also slugging a road user tax for Victorian buyers.
As before, the LCT tariff is still set at 33 per cent for each dollar over the threshold, while stamp duty is calculated on the post-LCT price of a vehicle.
For reference, the LCT was introduced in 2001 at the same time as the Goods and Services Tax (GST), originally designed to protect local vehicle manufacturing of the Holden Commodore, Toyota Camry, Ford Falcon and more.
However, since the demise of local manufacturing, there have been calls to abolish the tax as all vehicles are now imported to Australia.
Keyword: Buy now or wait? Australia's luxury car tax threshold moved upward from new financial year