Why does Australia still have LCT?
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Why does Australia still have LCT?
Introduced by the Federal Government on 1 July 2001, the LCT was implemented as a means to dissuade and limit Australians from buying imported prestige and exotic cars, encouraging them instead to purchase Australian-built cars from Holden, Ford and Toyota (back when such cars existed).
Will Australia removing luxury car tax?
The price the Australian Government may have to pay is the gradual decline of the 33 per cent Luxury Car Tax and some concessions on alcohol tax. As it stands today (2020-2021), LCT comes into affect at the rate of 33 per cent on cars that cost more than $68,740 and use more than 7.0L/100km of fuel.
Why do we still pay luxury car tax in Australia?
The Luxury Car Tax (LCT) is paid by dealerships for importing and supplying cars over a certain value. The problem is, in the years since the LCT was introduced, car buyers demand more from their cars and thanks to increased buying power, Australians want to buy bigger, better cars.
Will LCT be abolished?
“Technology in the automotive industry improves safety and environmental outcomes. But despite pressure from the motoring industry, Treasurer Josh Frydenberg stated in a 2020 interview with the Australian Financial Review the LCT wouldn’t be scrapped until the budget could afford it.
How can I avoid paying LCT?
Strategies to avoid the LCT include:
- Purchase a fuel efficient car (maximum 7 litres per 100/km) as a higher threshold of $75,526 applies.
- Lease the vehicle instead of buying.
- Omit some extra features to reduce the purchase price below the LCT threshold.
Can LCT be removed in Australia?
But despite pressure from the motoring industry, Treasurer Josh Frydenberg stated in a 2020 interview with the Australian Financial Review the LCT wouldn’t be scrapped until the budget could afford it. “When it comes to the Luxury Car Tax, we have no plans to remove that, but I would never say never,” he said.
Can you avoid luxury car tax?
For the LCT, the short answer is no. The longer answer is that if you fit into a very small niche of people buying a very particular niche of vehicle, you may be able avoid it. Commercial vehicles, such as some high-priced utes, that can carry more things than people by weight are exempt from LCT.
In what circumstances is luxury car tax LCT payable?
The luxury car tax (LCT) is a tax on cars with a total value above a threshold which is set by the ATO. It applies to sales of cars that are two years old or less. A car’s value is determined by the retail price, including GST and any customs duty, dealer delivery and extra items applied to the car before delivery.
Do used cars have LCT?
The most obvious is that it doesn’t apply to certain used vehicles or private sales, since the LCT will have already been paid when the car was first imported and sold. There’s an exception to this rule when the car is still under two years old and has actually increased in value.