Luxury Car Tax (LCT) is a tax of 33% on the GST-inclusive value of luxury cars over the relevant LCT threshold. You pay LCT when you sell/import a luxury car. You pay LCT as well as any GST payable.
The LCT thresholds for 2013 – 2014 financial year are:
- $75,375 for fuel-efficient cars
- $60,316 for other cars.
If you buy a car with a GST-inclusive value above these rates, you must pay LCT. The value of a car included the value of any parts/accessories/attachments you supplied or imported at the same time as the car.
What is a luxury car?
A luxury car is a car with a GST-inclusive value above the LCT threshold.
Under LCT law, a car is motor-powered road vehicle that is designed to carry the following:
- A load of less than two tonnes
- Fewer than nine passengers.
- Passenger cars
- Station wagons
- Four-wheel drive vehicles
- Limousines – regardless of the number of passengers they are designed to carry.
It does not include:
- Trucks and vans that can carry more than two tonnes
- Vehicles such as buses
- Motorcycles or similar
- Racing and rally cars
Who is liable for LCT?
You must pay LCT if both of the following apply:
- You are registered for GST
- You sell a luxury car
The amount of LCT that applies can vary on the following:
- When your car was ordered
- When your car was delivered
- The type of car
Accounting for LCT
You account for the LCT when completing your activity statement for the tax period which applies for GST.
You cannot claim GST credits for LCT, regardless of whether you use the luxury car for business or private purposes.
You are only able to claim depreciation on the luxury car tax you purchase up to the threshold – not the actual value of the luxury car.