Electric vehicles
A range of concessions to lower the cost of EVs
| Offered by: Commonwealth & NSW Governments |
| Available to: Residential - any |
| Description EVs are significantly cheaper to run, even when you charge them using commercial fast charging services. Electric motors have only a handful of moving parts and no transmission, so there is much less to go wrong, meaning lower servicing costs. Typical battery warranties are now eight years / 160,000km, so there's no need to be concerned about longevity. Plus, governments have introduced a range of measures to reduce some of the difference in up front costs, when compared to an equivalent petrol or diesel car. The Australian government has lowered the costs of new EVs through the following measures: - The Luxury Car Tax threshold for EVs is $89,332 vs $76,950 for internal combustion engine cars (from 1 July 2023). - If you are a business, refer separately [provide a link] to various tax concessions that may be available. Fringe Benefits Tax (FBT) is no longer applied to EVs that have a purchase price of less than $89,332. Plug-in hybrids up to the same purchase price are also FBT exempt, but only up to April 1, 2025. An exemption from FBT means the employee’s taxable income is reduced by the whole amount that is paid for the car from pre-tax pay. Cars are packaged through a novated lease – a three-way contract between the employee, the employer and a specialist salary packaging company, which also arranges the finance. At the end of the lease term, which is usually three to five years, the employee either leases the same vehicle again or upgrades to a new car with another lease. Not all employers offer salary packaging of vehicles. While many large employers offer packaging, many mid-sized and smaller employers do not. More are expected to now offer packaging, given the FBT exemption. Anyone thinking of packaging a car should look at the numbers carefully and make sure it works for their personal circumstances. Employees need to check the price of the car is competitive, along with the interest rate on the loan that is embedded in the lease, and the applicable fees, and also understand the impact on take-home pay. The NSW government has lowered the cost of new EVs through one remaining measure: - EVs receive a small discount on NSW motor vehicle registration fees. The amount of the discount depends on the weight of the vehicle and whether it is used for business or private use. - The NSW government is redirecting funding from the previous $3,000 EV rebate and stamp duty waiver to invest in building out public EV charging infrastructure. |
| What’s it worth? - The LCT threshold change is worth up to $1,530 depending on the vehicle. - The value of the FBT changes will depend on the value of the car, and the individual’s salary package. |
| How to claim: Most concessions are calculated by dealer at point of purchase or when registering the vehicle. |
| Link
Luxury Car Tax: https://www.ato.gov.au/Rates/Luxury-car-tax-rate-and-thresholds/ and https://www.drive.com.au/news/luxury-car-tax-threshold-increased-2023-24/ Registration Costs: https://www.nsw.gov.au/driving-boating-and-transport/vehicle-registration/fees-concessions-and-forms/lower-taxed-vehicles |
| Link
Luxury Car Tax: ATO website and Drive article Registration Costs: NSW Government website |
| Conditions No stated expiry. |