Some prices of prestige cars have been reduced thanks to the introduction of a new Luxury Car Tax threshold, making your next luxury car just that little bit more affordable.
At the beginning of the new 2020/2021 Financial Year, the Federal Government increased the the price at which the Luxury Car Tax (LCT) starts to apply to vehicles from $67,525 to $68,740. What this means is that the LCT will only start to apply to every dollar above $68,740.
The tax is calculated at 33 per cent on every dollar above $68,740, equating to a saving of roughly $401 for each vehicle.
The threshold for efficient vehicles such as hybrids and electric vehicles is $77,565, providing a saving of about $672.
Whilst the cost savings should be passed onto buyers in an economy seeing below average sales results due to the COVID-19 pandemic, some manufacturers have decided to actually increase prices. BMW’s recently revealed 5 Series premium mid size sedan for example bucks this trend, with all models increasing in price compared to their predecessor.
With renewed calls to abolish the LCT once and for all popping up yearly, what are your thoughts? Should the LCT be scrapped altogether or perhaps it should apply at all to electric cars? Let us know in the comments below.