The luxury car tax threshold has been bumped for the new financial year, going from $67,525 to $68,740, and from $75,526 to $77,565 for fuel-efficient vehicles.
'Fuel-efficient' vehicles in the Australian Taxation Office's (ATO) eyes are vehicles that consume less than seven litres of fuel per 100km.
This represents the first time in five financial years the threshold has been bumped for such vehicles.
For any vehicles with remaining values over these thresholds, there is an applicable tax of 33% and was originally designed to make locally-produced cars more attractive to buy.
In February, when Holden ceased rolling out vehicles altogether, there were calls to scrap the tax entirely.
Nationals senator Matt Canavan said at the time the tax unfairly targets farmers and small business owners.
“Many farmers have to buy vehicles that are above that threshold to operate their business,” Senator Canavan told the Nine Network.
“That sort of cost on our farms particularly when facing a drought, that’s something that should be looked at first in my view.”
The Federal Chamber of Automotive Industries' (FCAI) chief Tony Weber has previously said the tax is "money grabbing at its worst".
“The LCT actually penalises Australian consumers as it imposes unnecessary additional taxes on many vehicles which can in no way be described as luxury," he said in May 2019.
"The majority of people who pay the tax are average Australians who buy vehicles well under $100,000 to transport their families.
“The EU regards it as a false tariff and there is no doubt that it is a tax on technology and safety, preventing consumers from accessing the newest and safest vehicles."
In 2019, Car Advice found Toyota customers paid the most LCT compared to customers of other brands.
When looking at the 2020 Toyota Landcruiser GX manual utility, for example, the price guide is $68,590 (before on-road costs such as stamp duty and the LCT).
As the vehicle is now within the threshold, there is no LCT applicable, potentially saving buyers up to $351.
In the market for a new car? The table below features green car loans with some of the lowest fixed interest rates for fuel-efficient vehicles on the market.
Base criteria: fixed and secured car loans for 'low emission' cars. Data accurate as at 01 July 2020. Rates based on a loan of $30,000 for a five-year loan term. Products sorted by advertised rate, then by company name (A-Z). Repayments are calculated based on advertised rates. View disclaimer.
The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:
- The big four banks are: ANZ, CBA, NAB and Westpac
- The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2019. They are (in descending order): Credit Union Australia, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
- The larger non-bank lenders are those who (in 2019) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
Some providers' products may not be available in all states.
In the interests of full disclosure, Savings.com.au and loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.
*The Comparison rate is based on a $30,000 loan over 5 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.
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