Tax concessions on cars for people with a disability

Claiming a GST concession

If you are a working person or veteran with a disability, you may be eligible to claim a goods and services tax (GST) car concession.

To claim the concession, you will need to meet the eligibility criteria.

A veteran with a disability may qualify under either category.

GST car concessions apply to new or used cars. For GST purposes a car is a motor vehicle that can only carry:

• a load less than one tonne
• less than 9 passengers.

You may also be eligible to claim a concession for purchase of certain car parts.

Eligibility for a GST concession

You may be eligible for a GST car concession if you are a:

• working person with a disability
• veteran with a disability

Use the checklist to work out if you're eligible and the extent to which the tax concessions apply.

Working people with a disability

You're eligible for a GST car concession if you:

• have a certificate that certifies you have lost the use of one or more limbs to the extent that you are unable to use public transport – this can either be a    
  • permanent certificate issued by Medibank Health Solutions (MHS)
  • current certificate of medical eligibility issued in the approved form by a registered medical practitioner. The certificate can be permanent or temporary.
    • If you have a permanent certificate, you will generally be able to use it each time you buy a car or car part GST-free. If you lose or destroy the certificate, you must apply for a new certificate.
    • If your temporary certificate expires, you must apply for a new certificate. You must have a new certificate before you buy another car or car part GST-free.
     
   
• intend to use the car to travel for gainful employment from the date you get the car, for at least either
  • 2 years
  • until the car has travelled 40,000 kilometres.
   

Exceptions

You can't claim the GST concession:

• if you buy the car jointly with another person, such as a spouse or carer
• to the extent that the GST inclusive market value of the car exceeds the car limit - you must pay GST on the amount above the car limit less the cost of modifying the car solely to adapt it for your use
• if the car is leased under a full novation arrangement.
• if you
  • are not in gainful employment
  • want to use the car to look for gainful employment
  • work as a volunteer only
  • are a student only
  • are a pensioner or retiree only.
   

Gainful employment

A person with a disability is said to be gainfully employed if either of the following apply:

• you regularly undertake paid work or work in your own business and the payment you receive is appropriate for your age, experience and capabilities
• if you work in your own business, it is profitable or has the purpose and prospect of profit.

Certificate of medical eligibility

If you need to apply for a certificate of medical eligibility follow the steps below:

1. Download and complete an Application for a certificate of medical eligibility to obtain a car or car parts GST-free.
2. Visit your medical practitioner for assessment of your medical eligibility.
3. If eligible, request a certificate of medical eligibility from your medical practitioner.

Applying for a GST concession

If you meet the eligibility criteria, complete the application Declaration for an exemption of GST on a car or car parts - person with a disability who is gainfully employed and present it to your car or car parts supplier.

Veterans with a disability

You're eligible for a GST car concession if you are a veteran with a disability and you:

• have served in the Australian Defence Force or any other Commonwealth armed force and because of that service you either:   
  • lost a leg or both arms
  • have total and permanent loss of use in a leg or both arms
  • receive a TPI pension
  • receive, or are assessed by the DVA as eligible to receive, a special rate disability pension
   

To show that you are medically eligible, you can either:

• use your Veteran Gold Card embossed 'TPI'
• get a letter from the Department of Veterans (DVAExternal Link) that confirms you are eligible.

If you're an eligible veteran with a disability, you can also get an approved form from the Department of Veterans’ AffairsExternal Link to apply for a rebate on the purchase of a motorcycle and motorcycle parts.

Exceptions

You can't claim the GST concession:

• if you buy the car jointly with another person, such as a spouse or carer
• to the extent that the GST inclusive market value of the car exceeds the car limit - you must pay GST on the amount above the car limit less the cost of modifying the car solely to adapt it for your use
• if the car is leased under a full novation arrangement.
• even if you have a Veteran Gold Card embossed 'Totally and Permanently Incapacitated' (TPI) but are a
  • cadet
  • cadets' officer
  • cadets' instructor
  • declared member.
   

Applying for a GST concession

If you meet the eligibility criteria, complete the application Declaration for an exemption of GST on a car or car parts - disabled veterans and present it to your car or car parts supplier.

GST refund after purchase

If you didn't complete a declaration for exemption before you bought your car or car parts and the supplier has charged you GST, you may be able to get a refund of the GST. You will need to present the completed declaration for exemption to the supplier and ask them to refund you the GST amount.

Under the GST law, we're unable to provide you with a direct refund of the GST you paid on your car or car parts.

Leasing a car

If you're eligible for a GST car concession, you can also lease a car GST-free, if both of the following apply:

• the lease is for a minimum of 2 years, or you use the car to travel 40,000 kilometres from the date you lease it
• you intend to use the car for the prescribed purpose for the whole of that period – for example, an eligible person with a disability must also plan to use the car for their personal transport to or from gainful employment for the whole period.

Novation arrangements

Under a novation arrangement, your employer may agree with you and the finance company to take over all or part of the your rights and obligations under a lease.

Whether a car is GST-free under a novation arrangement depends on the type of arrangement you entered.

If you lease it under a partial novation arrangement the car is GST-free. Under a partial novation lease your employer does not lease the car, but you lease it directly.

If it is subject to a full novation arrangement the car is not GST-free. Under a full novation arrangement your employer leases the car.

Luxury car tax for people with disability

Some cars which exceed the LCT threshold attract luxury car tax (LCT). There is no exemption in the law from LCT for people with a disability (or disabled veterans), however the luxury car tax value of a car does not include the price of modifications made to the car solely to adapt it for you to drive or be driven in, such as wheelchair modification. LCT is not payable on cars specially fitted out for transporting disabled peopleExternal Link seated in wheelchairs (unless the supply of the car is GST-freeExternal Link). There are additional circumstances when LCT doesn't apply.

Where a luxury car is supplied GST-free to people with a disability, in calculating the luxury car tax payable, the luxury car tax value of the car includes the GST that would have been payable.

If you have a disability, you may be able to claim a GST concession when you buy or lease a car or buy car parts.