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  • Cars and tax

    9 June 2020

    From 1 July 2020 the following car threshold amounts apply.

    • Income tax
      • There's an upper limit on the cost you use to work out the depreciation for the business use of your car or station wagon (including four-wheel drives). You use the car limit that applies to the year you first use or lease the car.
      • The car limit for 2020–21 is $59,136.
       
    • Goods and services tax (GST)
      • Generally, if you purchase a car and the price is more than the car limit, the maximum amount of GST credit you can claim is one-eleventh of the car limit amount.
      • You can't claim a GST credit for any luxury car tax you pay when you purchase a luxury car, regardless of how much you use the car in carrying on your business.
       
    • Luxury car tax (LCT)
      • From 1 July 2020 the LCT threshold will increase to $ $68,740.
      • The LCT threshold for fuel efficient cars will increase to $77,565 for the 2020–21 financial year.
      • Remember, the LCT value of a car generally includes, the value of any parts, accessories or attachments supplied or imported at the same time as the car.
       

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