Luxury Car

The Luxury Car Tax is an additional tax on the value of new passenger cars over a threshold amount of $66,331. A higher threshold of $75,526 applies to cars with fuel efficiency of 7 litres per 100 kilometres or better. Tax is applied on the amount over the threshold value at a rate of 33%.

The Luxury Car Tax is budgeted to raise $740 million in 2018-19 and $3.1 billion over the forward estimates. It is our sixteenth largest tax.

It represents 0.16% of Commonwealth revenues, and 0.04% of GDP.

You can choose:

• the thresholds for imposition of luxury car tax for both ordinary and fuel efficient cars
• the rate of the tax
• to eliminate the tax by setting the rate to “0”

The model does not take account of the impact of changes to the Luxury Car Tax on GST or of any other second round effects.

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