Luxury Car Tax shake-up: fuel efficient vehicle threshold slashed to just 3.5L/100km! 

The Australian authorities is location to shake-up the Luxury Automobile Tax by tightening its ‘gas ambiance pleasant automobile’ definition, slashing the gas consumption threshold from 7.0L/100km to true 3.5L/100kms.

It will additionally alternate the indexation fee for the LCT fee threshold in changes location to take location from 1st July 2025.

The switch appears intent on in actuality wiping out internal combustion autos from heading off LCT, leaving electric autos and some hybrids and PHEVs defined as ‘gas ambiance pleasant autos’.

The Federal Chamber of Industries (FCAI) has been rapid to reply to presently time’s announcement, calling out the federal authorities, pleading for the Luxury Automobile tax (LCT) to be abolished.

FCAI’s chief govt officer Tony Weber acknowledged that the tax is pointless for price fresh low emission technology autos.

“The LCT penalises Australian patrons, because it imposes pointless extra taxes on many low emission technology autos,” Mr Weber acknowledged.

“The changes introduced presently time in MYEFO slug Australians with extra taxes and blueprint autos less practical. The alternate to indexation is correct one other cynical earnings grabbing express.

“Australians want proper tax reform, somewhat than tinkering at the edges.”

The fresh rule is location to attain into terminate on 1st July 2025.

What’s the idea for the LCT in 2025?

Fancy earlier than, there shall be a LCT threshold for gas ambiance pleasant and ‘other autos’ in Australia.

On the 2nd, the threshold is $89,332 for gas-ambiance pleasant autos and $76,950 for ‘other autos’.

Nonetheless, the Executive has introduced this also can honest tumble the definition of gas-ambiance pleasant automobile from a automobile with a most gas consumption of 7.0L/100km to true 3.5L/100km, in actuality wiping out many combustion luxury autos.

The alternate is location to magnify tax earnings by $155 million over five years from 2023.