On 5 May 2026, as part of the 2026–27 Federal Budget, the Government announced fairer tax treatment to encourage affordable EVs.
The existing electric car discount will continue in full until the end of March 2027.
Between 1 April 2027 and 1 April 2029, the following transitional arrangements are in place:
- All electric cars costing $75,000 or less will continue to be eligible for a 100% discount on FBT, implemented through a 0% rate in the FBT statutory formula.
- Electric cars costing more than $75,000 but below the luxury car tax (LCT) threshold will receive a 25% discount on their payable fringe benefits tax (FBT) implemented through a 15% FBT statutory formula rate.
From 1 April 2029 onwards, all electric cars below the LCT will receive the 25% discount on their payable FBT.
Existing leases won't be impacted by these changes.
This measure is not yet law.
For more information, see: