The ATO has updated the Luxury Car Tax (LCT) thresholds for the 2015/16 financial year. Starting the 1st of July 2015 luxury car buyers can now look forward to a small price saving.
Beginning this financial year the threshold has been raised from $61,884 to $63,184, giving consumers/business owners a difference of $1300. Hence, a saving of $400 on luxury cars above $63,184 if they consume more than 7.0 litres of fuel per 100 kilometres.
The tax on more fuel-efficient cars, for example diesel and hybrid variants remains unchanged. Fuel efficient motor vehicle’s have a fuel consumption that does not exceed 7.0 litres per 100km. This is a combined rating under the vehicle standards in force under section 7 of the Motor Vehicle Standards Act 1989. The LCT threshold on fuel-efficient vehicles remains unchanged at the higher $75,375 price point.
In summary the luxury car tax threshold change is effective from the 1st of July 2015 and applicable for the 2015/2016 financial year are based on a 2.1% consumer price index rise and will apply for the next 12 months. In affect luxury cars attract a tax of 33% on the portion of the price above the threshold, compared with the standard 10% GST below. The LCT thresholds are as follows:
– ‘Standard’ motor cars at $63,184
– ‘Fuel-efficient’ motor cars at $75,375 (unchanged)
BMW and Porsche were quick to assure customers that the savings from the new LCT threshold would be passed on. The price cuts were factored into new BMW vehicles launched last month that includes the M135i and the 6 series. Porsche Australia have also announced price cuts across most of the Porsche range, rounding out the savings figure to $400.