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  • Eligibility for tax concessions on cars

    If you have a disability you may be able to claim tax concessions when you buy or lease a car or buy car parts. You must meet the eligibility criteria.

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    When you can claim tax concessions on cars

    To claim tax concessions, you must be either a person or veteran with a disability who meets the eligibility criteria.

    Car tax concessions apply only to cars. For GST a car is a motor vehicle that can only carry:

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

    For luxury car tax (LCT) a car is a motor vehicle that can only carry:

    • a load less than two tonnes
    • less than nine passengers.

    Many four-wheel drive vehicles are included in this definition. These tax concessions don't apply to other vehicles such as motorcycles, trucks or vans.

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

    When you can't claim tax concessions on cars

    Person's with a disability who are not a veteran, can't claim tax concessions if you:

    • are not in gainful employment
    • buy the car jointly with another person, such as a spouse or carer
    • want to use the car to look for gainful employment
    • work as a volunteer only
    • are a student only.

    'Gainful employment' – a person with disability is said to be gainfully employed if both of the following apply:

    • you regularly undertake paid work or work in your own business
    • the payment you receive is appropriate for your age, experience and capabilities.

    Eligibility for people with disability

    You're eligible for car tax concessions 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)
      • a current certificate of medical eligibility from a medical practitioner – these are valid from 9 December 2020 and can be permanent or temporary.
       
    • intend to use the car to travel to or from gainful employment from the date you get the car, for either:
      • two years
      • until the car has travelled 40,000 kilometres. 
       

    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 by completing an Application for a certificate of medical eligibility to obtain a car or car parts GST-free.

    If your temporary certificate expires, you will need to apply for a new certificate. You must have a new certificate before you buy another car or car part GST-free.

    If you have a letter from us about buying a car or car part GST-free, you can use this until 9 March 2021. After this date you will need to complete an Application for a certificate of medical eligibility to obtain a car or car parts GST-free.

    Eligibility for veterans

    You're eligible for car tax concessions if you are a veteran with a disability and you:

    • intend to use the car for your personal transport from the date you get the car, for either
      • two years
      • until the car has travelled 40,000 kilometres.
       
    • have served in the Australian Defence Force or any other Commonwealth armed force and as a result of that service any of the following apply:
      • you lost a leg or both arms
      • total and permanent loss of use in a leg or both arms
      • you receive a totally and permanently incapacitated (TPI) pension
      • you receive a special rate disability pension.
       

    To show that you are eligible, you can either:

    You must also complete a Declaration for an exemption of GST on a car or car parts - disabled veterans (NAT 3418). Give this to your car or car parts supplier to support supplying the car GST-free.

    Even if you have a gold repatriation health card, you can't buy a car GST-free if you are any of the following:

    • a cadet
    • a cadet’s officer
    • a cadet’s instructor
    • a ‘declared member’.

    You also can't claim a tax concession on a car you buy jointly with another person, such as a spouse or carer.

    Apply for a 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.

    You must then complete a Declaration for an exemption of GST on a car or car parts - person with a disability who is gainfully employed (NAT 3419). Give this to your car or car parts supplier to support supplying the car GST-free.

    Only applications for medical assessment completed prior to 9 December 2020 must be sent to us for assistance. Send this to the address on the form.

    Checklist

    Use this checklist to help you work out if you are eligible for a GST or LCT concession when you buy or lease a car.

    Question 1. Have you served in the Australian Defence Force or any other Commonwealth armed force? (If you are a cadet, officer of cadets, instructor of cadets or a ‘declared member’, you do not meet this requirement and must answer No).

    Yes – Go to question 2

    No – Go to question 3

    Question 2. As a result of that service, do any of the following apply:

    • you lost a leg or both arms
    • a leg or both arms are permanently and completely useless
    • you receive a totally and permanently incapacitated (TPI) pension
    • you receive a special rate disability pension?

    Yes – Go to question 5

    No – Go to question 3

    Question 3. Do you have a permanent certificate from Medibank Health Solutions (MHS) that certifies you have lost the use of one or more limbs to the extent that you can’t use public transport?

    Yes – Go to question 6

    No – Go to question 4

    Question 4. Do you have a current certificate of medical eligibility from a registered medical practitioner that certifies you have lost the use of one or more limbs to the extent that you can’t use public transport?

    Yes – Go to question 6

    No – The car is not GST-free

    Question 5. Do you intend to use the car from the date you obtain it for your personal transport for either two years or until the car has travelled 40,000 kilometres?

    Yes – Go to question 7

    No – The car is not GST-free

    Question 6. Do you intend to use the car from the date you obtain it for travel to or from gainful employment for either two years or until the car has travelled 40,000 kilometres?

    Yes – Go to question 7

    No – The car is not GST-free

    Question 7. Is the GST inclusive price of the car less than the car limit (see Car limit for this year's limit)?

    Yes – The car is GST-free

    No – Go to question 8

    Question 8. Has the car been modified so you can drive or travel in it?

    Yes – The car is GST-free up to the car limit. You must pay GST on the value of the car above that limit and LCT above the LCT threshold. GST and LCT are not payable on modifications made solely to adapt the car for your use.

    No – The car is GST-free up to the car limit. You must pay GST on the value of the car above that limit and LCT above the LCT threshold.

    See also:

    Last modified: 24 Feb 2021QC 33261