Luxury car tax (LCT)

Luxury car tax is a 33 percent tax on the portion of a car's price above the LCT threshold, with a higher threshold for fuel-efficient vehicles that also acts as the price cap for the electric car FBT exemption.

For fleets, LCT matters twice. It adds cost to vehicles above the threshold, and the fuel-efficient threshold ($91,387 for 2025-26, $91,661 for 2026-27) is the eligibility test for the FBT electric car exemption: if LCT was ever payable on the car, the exemption is off the table.

Thresholds are indexed every 1 July, so the year the car was first held matters.

Last updated 10 July 2026. General information, not tax or legal advice.