Luxury Car Tax

New Limits for 2015-2016

Cars with a luxury car tax (LCT) value over the LCT threshold attract an LCT rate of 33%.

Luxury Car Tax (LCT) limits have changed for the 2015-2016 financial year after the ATO  updated the LCT thresholds, effective from 1 July 2015.

For ‘Standard’ motor cars, the limit is $63,184 (increased from $61,884 - 2014)

For ‘Fuel efficient’ motor cars, the limit is $75,375 (unchanged)

Vehicles that have a fuel consumption that does not exceed 7 litres per 100 klms is classed as "fuel efficient" under the vehicle standards in force under section 7 of the Motor Vehicle Standards Act 1989

The Luxury Car Tax is different to the Car Depreciation Limit, which is used for calculation of tax deduction claims for “decline in value”.

There is no change to the Car Depreciation Limit, which remains at $57,466.  This means that the maximum GST Input Tax Credit (ITC) on motor cars is limited to $5,224.18 (which is 1/11th  of the Car Depreciation Limit).

For further information on tax rates and thresholds, visit the following ATO links:

https://www.ato.gov.au/rates/luxury-car-tax-rate-and-thresholds/

http://atotaxrates.info/tax-deductions/work-related-car-expenses/luxury-car-limits/

Need more information? Contact us and we'll be happy to answer any questions or provide further details.

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