Luxury car tax: threshold increase and amendments

Threshold increase and amendments

Luxury car tax (LCT) applies to certain vehicles over the luxury car tax threshold ($57,180 for the 2008–09 year).

The government announced in the 2008–09 Budget that it would increase the LCT rate from 25% to 33% from 1 July 2008.

Legislation to increase the LCT rate from 1 July 2008 became law on 3 October 2008, and includes a number of concessions:

• In certain circumstances primary producers and tourism operators will be able to claim a refund of the additional 8% LCT (to a maximum of $3,000) on certain 4 wheel drive or all wheel drive vehicles.
   
• LCT will not apply to certain fuel efficient cars under the fuel efficient car limit ($75,000 for the 2008–09 year) from 3 October 2008. LCT at the rate of 33% will apply to vehicles above this threshold.
   
• 25% LCT will apply to contracts entered into for purchases or imports of a luxury car before 7.30pm Australian Eastern Standard Time (AEST) on 13 May 2008 (the date of the Federal Budget announcement to increase the LCT rate).

Administrative advice Advice for dealing with the luxury car tax legislation, and information on refunds for primary producers and tourism operators can be found in: Luxury car tax (NAT 3394), and GST and LCT on cars you buy - primary producers and tourism operators (NAT 72601).

Press releases

For more information, please see the:

• Treasurer’s press release, number 042/2008
• Treasurer’s press release, number 074/2008

Legislation and supporting material

• Tax Laws Amendment (Luxury Car Tax) Bill 2008
• A New Tax System (Luxury Car Tax Imposition-General) Amendment Bill 2008
• A New Tax System (Luxury Car Tax Imposition-Customs) Amendment Bill 2008
• A New Tax System (Luxury Car Tax Imposition-Excise) Amendment Bill 2008
• Explanatory Memorandum
• Supplementary Explanatory Memorandum (PDF, 37.16kB)
• Revised Supplementary Explanatory Memorandum (PDF, 38.82kB)
• A New Tax System (Luxury Car Tax) Amendment Regulations 2008 (No. 1)
• Legislative Instrument Compilation (current) - Vehicle Standard (Australian Design Rule - Definitions and Vehicle Categories) 2005

Last Modified: Tuesday, 20 October 2009

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