If you buy a car from now on, any car over $60,316 or a ‘fuel efficient car’ over $75,375 will get hit with a 33% luxury car tax. That’s not really new, what the LCT changes are that if a car has ‘factory bonus’, you’ll get taxed on that.
Put simply, if there’s a cash-back offer of $5000, you’ll only see about $3300 of that discount off the price of the car.
Not that the local market needed any more reason to leave Australia right?
A fuel efficient car according to the LCT guidelines (attached below), is a vehicle with a fuel efficiency of 7 litres per 100km.
So, whilst a good number of European cars like Mercedes-Benz, BMW and Audi are exempt from LCT, manufacturers like Toyota will be hit hard with their models like the Landcruiser and Tarago being popular sellers.
According to tax office figures, LCT generated $441 million in revenue for the 2011-2012 financial year. Car manufacturers like Toyota and BMW have called to have the tax abolished completely previously but of course, been unsuccessful.
What do you think about LCT? Does it still have a place where our Government has a debt or is it no needed anymore? Let us know!
If you want to do some further reading on LCT and whether it is past its use by date check out this article from Curtain University.
Also below is an example from Polk to show how the new calculations now work:
|Drive Away Price||$71,872.80|
|Drive Away Price||$72,192.80|