Luxury Car Tax

New Limits for 2016-2017

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

From 1st July 2016, Luxury Car Tax (LCT) limits have changed for the 2016-2017 financial year.

For ‘Standard’ motor cars, the limit is $64,132 (increased from $63,184)

For ‘Fuel efficient’ motor cars, the limit is $75,526

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”.

The Car Depreciation Limit for 2016/17 is $57,581.  This means that the maximum GST Input Tax Credit (ITC) on motor cars is limited to $5,234.63 (which is 1/11th  of the Car Depreciation Limit).

Note: it may be possible that in some cases, there will be non-claimable GST without LCT for vehicle purchases (e.g. $57,581 to $64,132).

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/

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