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Luxury Car Tax Thresholds: A Guide for Savvy Buyers If you're in the market for a luxury car, it's important to understand the luxury car tax thresholds. This tax is levied on luxury cars that exceed a certain value and is designed to discourage the purchase of expensive vehicles. But don't worry, with a little bit of knowledge, you can still enjoy the finer things in life without breaking the bank. First, let's define what a luxury car is. In Australia, a luxury car is defined as any vehicle with a value of over $77,565 (as of 2021). If your car falls in this category, you'll be subject to the luxury car tax. The current rate is 33% of the value above this threshold. For example, if your car is worth $100,000, you'll pay luxury car tax on the $22,435 that exceeds the threshold. This means you'll pay $7,408 in luxury car tax, bringing the total cost of your car to $107,408. Now, let's take a look at the luxury car tax thresholds for the 2021-2022 financial year: - Cars with a fuel consumption of less than 7.0 litres per 100km will have a threshold of $77,565. - Cars with a fuel consumption of 7.0 litres per 100km or more will have a threshold of $68,740. It's important to note that these thresholds are subject to change each financial year, so it's important to keep up to date with the latest information. But there are ways to reduce the amount of luxury car tax you pay. One option is to purchase a fuel-efficient car, which will have a lower luxury car tax threshold. Another option is to purchase a car that has been imported as a "grey import". These vehicles often have a lower value and therefore a lower luxury car tax threshold. In conclusion, understanding the luxury car tax thresholds is crucial for anyone looking to purchase a luxury vehicle. By knowing the current thresholds and exploring your options, you can make an informed decision about which car is right for your budget. 
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