Australia Luxury Car Tax Guide
the Australian Luxury Car Tax (LCT). The guide covers: the LCT rate and the thresholds — the 'LCT' is the 'luxury car tax' imposed under the 'A New Tax System (Luxury Car Tax) Act 1999'; the LCT rate is 33% on the 'luxury car value' (the 'GST-inclusive value' above the 'LCT threshold'); the 'LCT threshold for the 2025-26 income year' is $89,332 for the 'fuel-efficient cars' (the 'cars with the fuel consumption of 7 litres per 100 kilometres or less'); the 'LCT threshold for the other cars' is $79,732 (the 'standard car threshold'); the 'LCT' is calculated as 33% of (the GST-inclusive value — the LCT threshold); the LCT-exempt cars — the 'cars' that are 'exempt from the LCT' include: (i) the 'cars for the disability modifications' (the 'cars that are modified for the use of the persons with the disability'), (ii) the 'cars for the emergency services' (the 'police cars', the 'ambulances', the 'firefighting cars'), (iii) the 'cars for the export' (the 'cars that are exported from Australia within 12 months'); the LCT and the GST interaction — the 'LCT' is calculated on the 'GST-inclusive value' of the 'car' (the 'value that includes the GST'); the 'LCT' is the 'additional tax' on top of the 'GST'; the 'car dealer' (the 'LCT-registered entity') must charge the 'LCT' on the 'sale of the luxury cars'; the 'LCT' is 'reportable' in the 'Business Activity Statement (BAS)' — the 'LCT payable' is reported in the 'BAS' alongside the 'GST'; the LCT refund for the exporters — the 'exporters' of the 'luxury cars' (the 'cars that are exported from Australia within 12 months of the purchase') can claim the 'LCT refund' (the 'LCT refund under the Section 15-10 of the LCT Act'); the 'LCT refund' is the 'full amount of the LCT paid' on the 'car' if the 'car' is 'exported' and the 'export conditions' are met; the 'exporter' must be the 'LCT-registered entity' or the 'individual' who 'exports the car as the personal use'.
LCT Thresholds & Rates (2025-26)
- Standard car threshold: $79,732 (the 'GST-inclusive value' above this threshold is subject to the 'LCT at 33%'). The 'standard threshold' applies to the 'cars' that do NOT meet the 'fuel-efficient car criteria'.
- Fuel-efficient car threshold: $89,332 (the 'cars with the fuel consumption of 7 litres per 100 kilometres or less'). The 'fuel-efficient cars' have the 'higher LCT threshold'.
- LCT calculation: 33% × (the 'GST-inclusive price' — the 'applicable LCT threshold'). For example, the 'car valued at $100,000 with the fuel consumption above 7L/100km' — the 'LCT' = 33% × ($100,000 − $79,732) = $6,688.
For the GST on the car purchases and the input tax credits, see our GST Guide →.
LCT-Exempt Cars
- Disability modifications: The 'cars modified for the use of the persons with the disability' are 'exempt from the LCT'. The 'modifications' must be 'substantial' and 'permanent' (the 'wheelchair modifications', the 'hand controls').
- Emergency services: The 'cars for the police', the 'ambulances', and the 'firefighting services' are 'exempt from the LCT'.
- Export: The 'cars exported from Australia within 12 months of the purchase' are 'exempt from the LCT'. The 'exporter' must provide the 'evidence of the export' (the 'export documentation').
For the motor vehicle tax deductions and the car expenses, see our Motor Vehicle Tax Guide →.
LCT Reporting & Refunds
- BAS reporting: The 'LCT payable' is reported in the 'Business Activity Statement (BAS)'. The 'LCT' is the 'separate label' in the 'BAS'. The 'LCT' is 'payable quarterly or monthly' depending on the 'GST reporting cycle'.
- LCT refund: The 'exporter' can claim the 'LCT refund' if the 'car' is 'exported within 12 months of the purchase'. The 'refund' is the 'full LCT amount' paid on the 'car'. The 'refund' is claimed through the 'ATO' (the 'LCT refund application').
For the BAS lodgement and the GST reporting, see our GST Guide →.