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Luxury Car Tax - Refunds for Tourism Operators and Farmers

What is the Luxury Car Tax?

Luxury car tax applies where the GST-inclusive price of a motor vehicle exceeds a certain threshold. The threshold for the 2019/20 income year is currently $75,526 for fuel-efficient cars and $67,525 for all other vehicles.

Generally, the tax is calculated at a rate of 33% for the amount over the threshold.

Eligibility

Tourism Operators and Farmers (primary producers) are eligible for a partial refund of the luxury car tax they pay on the purchase of a suitable four-wheel and all-wheel drive cars. For vehicles acquired on or after 1 July 2019, you can apply for a refund up to a maximum of $10,000. Refunds for vehicles purchased prior to this date are capped at $3,000.

Eligibility Criteria

Tourism Operators

  • Carrying on a tourism business, with the principle purpose of business to carry tourists for tourist activities,
  • The car must be used for the purpose of carrying on business,
  • Register for GST,
  • The car purchase must be a four-wheel drive or all-wheel drive, AND either:
    • a passenger car (having up to 9 seating positions) and has a ground clearance of not less than 175mm, or
    • an off-road passenger vehicle (having up to 9 seating positions and being designed with special features for off-road operation).

Tourism operators can claim a refund for all eligible cars. Therefore, multiple claims can be made each year.


Farmers

  • Carry on a primary production business,
  • Registered for GST,
  • The car purchased must be a four-wheel drive or all-wheel drive, AND either:
    • a passenger car (having up to 9 seating positions) and has a ground clearance of not less than 175mm, or
    • an off-road passenger vehicle (having up to 9 seating positions and being designed with special features for off-road operation).

Primary producers can only claim one refund per financial year, and the refund claim must be within four years of purchase.

Yellow circle with a yellow car in the middle graphic.  NOTE: the refund applies even if the car is purchased through a financing arrangement. 

Refund Calculation

The refund is calculated as the lessor of:

  • 8/33 of the Luxury Car Tax Charged for the vehicle, and
  • $10,000

Example: to receive the maximum $10,000 refund the cost of the vehicle will need to be $205,025.

Pricing including GST: $205,025
Luxury car tax: ($205,025 - $67,525) x 10/11 x 33% = $41,250
LCT Refund: $41,250 x 8/33 = $10,000
Total net cost of vehicle after LCT refund: $236,275

How can Brentnalls SA help?

If you have any questions, please contact Brentnalls SA and ask to speak to one of our advisors. Helping businesses achieve their goals is our passion and our strength is in our dedicated professional team. Brentnalls SA provide services in the Agribusiness industry.

Your success is our success!

If you would like to print this information please click the related industry for PDF format. 

Disclaimer
The information provided in this information sheet does not constitute advice. The information is of a general nature only and does not take into account your individual situation. It should not be used, relied upon, or treated as a substitute for specific professional advice. We recommend that you contact Brentnalls SA before making any decision to discuss your particular requirements or circumstances.
 

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Our services go beyond compliance to find out more about your goals, your priorities and establish plans to grow and protect your future wealth. We will take the time to listen, ensuring we meet your goals, as well as guide you so you have a better understanding of the financial decisions being made. Our services include:

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