federal luxury car tax Tax thresholds lct

Luxury car tax is a levy imposed by the federal government in Australia on imported cars that are worth over a certain threshold. It affects both businesses and individuals, so it is important to understand how the tax works before purchasing a luxury vehicle. Firstly, it is important to note that the threshold for luxury car tax is adjusted each year by the Australian Taxation Office (ATO), so it is essential to check the current threshold before making a purchase. For the 2021-2022 financial year, the threshold is $69,152 for fuel-efficient vehicles and $77,565 for other vehicles. If the value of the car exceeds the threshold, the luxury car tax will be applied at a rate of 33% on the amount over the threshold. For example, if a car is valued at $80,000, which is $2,435 over the threshold for non-fuel-efficient vehicles, the luxury car tax payable would be $803.55 ($2,435 x 33%). It is also important to note that luxury car tax is not the only tax payable on luxury vehicles. There is also a goods and services tax (GST) payable on the purchase of the car, which is calculated at a rate of 10% of the purchase price. This means that the total tax payable on a luxury car could be significant, so it is important to factor this into your budget when considering a purchase. When purchasing a luxury vehicle, it is also important to consider the ongoing costs of ownership. Luxury cars generally require more expensive maintenance and repairs, as well as higher fuel costs. It is important to factor these costs into your budget to ensure that you can afford to maintain and run the vehicle in the long term. In summary, luxury car tax is a levy imposed by the Australian government on imported cars that are worth over a certain threshold. The tax is calculated at a rate of 33% on the amount over the threshold, with the threshold adjusted each year by the ATO. When purchasing a luxury vehicle, it is important to consider the total cost of ownership, including ongoing maintenance, repair, and fuel costs. By understanding the luxury car tax and other costs associated with owning a luxury vehicle, you can make an informed decision about whether it is the right choice for you.

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