Luxury Tax Calculator

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Frequently Asked Questions About Luxury Car Tax

Luxury Car Tax (LCT) is a tax applied to certain vehicles that exceed a set price threshold set annually by the government. It applies to the portion of the car's value above the threshold, with a tax rate of 33%.

 

The threshold varies depending on whether the vehicle is fuel-efficient or not. LCT is typically applied at the point of sale for both new and imported vehicles. For the latest thresholds and rates, refer to the Australian Taxation Office website.

If the total purchase price of your car (including GST but excluding other government fees and charges) exceeds the Luxury Car Tax threshold, you’ll be required to pay Luxury Car Tax. Here’s how it is calculated:

  1. Determine the car's total cost (including GST but excluding government fees like stamp duty, registration, and compulsory third-party insurance).
  2. Subtract the current Luxury Car Tax threshold from the car’s price.
  3. Divide the result from step 2 by 1.1 to remove the GST.
  4. Multiply the figure from step 3 by 33%, which is the Luxury Car Tax rate.

Keep in mind that if you have a fuel-efficient or ‘green’ vehicle, the threshold is higher, potentially reducing the amount of tax payable.

For more on working out the LCT amount, visit the Australian Taxation Office website.

Luxury Car Tax is only applicable to vehicles that meet luxury car criteria.

Certain vehicle purchases are exempt from Luxury Car Tax, including:

  • Cars with a total purchase price under the Luxury Car Tax threshold (including GST but excluding other government fees and charges).
  • Fuel-efficient ‘green’ vehicles that fall below the Luxury Car Tax threshold for fuel-efficient cars (including GST and excluding other government-related charges).
  • Commercial vehicles that are primarily designed for purposes other than passenger transport.
  • Disabled transport vehicles modified for transporting wheelchair passengers

For more on when LCT does not apply, visit the Australian Taxation Office website.

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