12% of original value
This method is not available from 1 July 2015.
If you use this method before 1 July 2015:
- you can claim 12% of the original value of your car (subject to the car limit), so:
- if you bought the car, you could claim 12% of the cost
- if you leased the car, you could claim 12% of its market value from the first time it was leased
- your car must have travelled more than 5,000 business kilometres during the income year
- you do not need written evidence to show how many kilometres you have travelled, but we may ask you to show how you worked out your business kilometres.
The car limit was set at $57,466 for 2015–16. The limit is reviewed each year.
Raji’s vehicle cost $20,000. She had the vehicle for the full year and met the requirements to make a claim under this method. Raji worked out she could claim $2,400 for her vehicle expenses, as follows: 12% × $20,000 = $2,400.
End of example
Note: you cannot claim a separate deduction for your car’s depreciation if you use either this method or the cents per kilometre method to work out your car expenses.
Changes from 1 July 2015
From 1 July 2015, the 12% of original value method has been abolished. This means you will not be able to use this method to claim your car expense deductions in your 2016 and future tax returns.
To claim your car expenses deductions from 1 July 2015, if you travel:
If you use this method, you claim 12% of the original value of your car.