Luxury car tax threshold 2026–27

For cars sold or imported from 1 July 2026 to 30 June 2027: $91,661 for fuel-efficient vehicles and $80,809 for other vehicles. Luxury car tax is 33% of the value above the threshold. The ATO gives an indexation factor of 1.003 for 2026–27.

Why it matters for a novated lease

The fuel-efficient threshold is the upper limit of every electric car FBT concession. An electric car above it gets no exemption now and would get no discount under the 2027 proposal: it is taxed at 20% of its base value like any other car. Below it, the car is exempt today; under the proposal, $75,000 becomes a second line, with a 100% discount below and 25% above. See the 2027 changes by price band.

Luxury car tax thresholds by financial year (ATO)
Financial year	Fuel-efficient vehicles	Other vehicles
2026–27	$91,661	$80,809
2025–26	$91,387	$80,567
2024–25	$91,387	$80,567
2023–24	$89,332	$76,950
2022–23	$84,916	$71,849

From 1 July 2025 the Treasury Laws Amendment (Tax Incentives and Integrity) Act 2025 changed the definition of a fuel-efficient vehicle and aligned the indexation of both thresholds, according to the ATO.

General information only. This is an estimate built from the ATO’s published rates and formulas and the numbers you enter. It is not financial advice, tax advice or credit assistance, and it does not recommend any lease, loan, lessor or lender. Your employer’s and your financier’s figures are the ones that count. Read the disclaimer.

Frequently asked questions

What is the luxury car tax threshold for 2027–28?

Not published yet. The ATO page with the 2026–27 figures was updated on 1 June 2026, a month before the year started. Until then, $91,661 is the latest fuel-efficient figure, and the calculator uses it for later years with a note.

Which threshold applies to an electric car?

The fuel-efficient vehicle threshold. It is also the ceiling for the electric car FBT exemption: under current law, luxury car tax must never have been payable on the car; under the proposed 2027 rules, the car’s base value must not exceed the fuel-efficient car limit for the year the employer first holds it.

Is luxury car tax charged on the whole price?

No. 33% applies only to the part of the GST-inclusive value above the threshold. The value includes parts, accessories and attachments supplied with the car.

Official sources

Luxury car tax rate and thresholds — ATO, page updated 1 June 2026.
Car thresholds from 1 July (car limit $69,883, GST credit cap $6,353) — ATO, published 9 June 2026.
Electric cars exemption — ATO, page updated 1 April 2026.
Sustainable fringe benefits tax treatment of electric cars – consultation, exposure draft "Treasury Laws Amendment Bill 2026: Phased changes to the FBT electric car exemption" and explanatory materials — Treasury, consultation closed 28 September 2026.

All sources checked on 1 October 2026.

Page updated 1 October 2026.