Question 1

Does LCT apply to used cars?

Accepted Answer

LCT applies when a luxury car is sold for the first time in Australia. Private sales of used cars are generally not subject to LCT. However, if a used luxury car is imported and sold by a dealer for the first time in Australia, LCT applies on the GST-inclusive sale price if it exceeds the threshold.

Question 2

Do electric vehicles pay LCT?

Accepted Answer

Electric vehicles benefit from the higher fuel-efficient threshold of $91,387 rather than the standard $80,567. If the EV's GST-inclusive value is below $91,387, no LCT is payable. For EVs priced above this threshold, LCT applies at the standard 33% rate on the excess.

Question 3

Can I claim LCT as a business deduction?

Accepted Answer

If the car is used in your business, the LCT paid is included in the car's cost base for depreciation purposes. However, the car cost limit for income tax depreciation is $69,674 (FY2025-26), which caps the depreciable amount regardless of the actual purchase price. If you are registered for GST, you can claim a GST credit on the car but the LCT itself is not a GST credit -- it is a separate tax.