Luxury car tax threshold raised

AUSTRALIA’S end-of-financial-year sales might be over, but buyers of many luxury cars can at least look forward to a small price saving, thanks to the federal government’s annual indexation adjustment of the luxury car tax (LCT) threshold.

Applying from July 1, the threshold has been raised from $61,884 to $63,184 – a difference of $1300 – meaning an LCT saving of about $400 on luxury cars above that level, if they consume more than 7.0 litres per 100 kilometres of fuel.

The tax on more fuel-efficient vehicles – mainly diesel and hybrid variants – remains unchanged, with the LCT threshold staying at the higher $75,375 price point.

The LCT threshold adjustment is based on a 2.1 per cent consumer price index rise, and will apply for the next 12 months.

Affected luxury cars attract a tax of 33 per cent on the portion of the price above the threshold, compared with a standard 10 per cent GST below.

BMW, Porsche, Audi and Toyota were quick out of the blocks to assure customers that the LCT savings would be passed on.

BMW Group Australia says all affected models in its range will enjoy a $390 price cut.

Group chief executive officer Marc Werner said his company would pass on the entire saving.

The price cuts had already been factored in on BMW vehicles launched last month, including the M135i and 6 Series range.

Porsche Cars Australia also has announced price cuts across most of its range, rounding out the figure to $400.