Luxury Car Tax – Everywhere consumers tur they pay tax. The car industry is no different. Finance company Savvy, has analysed the effect of a reduction in the LCT on EVs.
Savvy analysis shows several luxury EV models including the Audi Q6 e-tron, Kia EV6 GT, Mercedes-Benz EQA350 and Hyundai Ioniq 9 are in line for huge discounts after the Australian Government committed to increasing the luxury car tax (LCT) threshold.
Key takeaways:
- The LCT threshold will rise from $91,387 to $120,000 for zero emission vehicles
- Up to $8,584 discount available on EVs priced up to and beyond $120,000
- A $115,000 Hyundai Ioniq 5 N could attract savings of up to $71,000 with a novated lease if the FBT threshold is also raised
Should the upper limit for FBT rise in line with LCT, consumers will be able to take out a novated lease for a car worth up to $120,000 and have 100% of the payments come out of your pre-tax income.
The combined savings from GST and PAYG taxes through novated leasing can reach as much as a staggering $71,000 on a $115,000 vehicle, reducing your approximate net spend on the car to just $43,000.
The sheer volume of savings available is proving too hard to ignore for many Australians, according to Adrian Taylor, General Manager of Savvy Benefits.
“More and more people are choosing an electric car for their primary mode of transport”, Mr Taylor said.
“Most Australians finance vehicles or pay cash, but for an electric car, a novated lease is often cheaper than both.
For those looking to maximise their budget before upgrading to a new EV, obtaining cash for cars can provide additional funds to put towards a deposit or reduce overall financing costs.
“If you aren’t at least considering novated leasing as an option and are able to take one out through your current employer, you could be leaving stacks of money on the table.”
Full media release published on Savvy https://savvy.com.au/car-loans/luxury-car-tax-changes-2026/
