Luxury car tax threshold rises to $91,387 for fuel-efficient vehicles
Source: ATO
The 2025–26 fuel-efficient LCT threshold captures a growing range of EVs. Understanding this cap is essential when comparing novated lease quotes.
For the 2025–26 financial year, the fuel-efficient luxury car tax threshold is $91,387. This figure includes the vehicle base price, GST, factory options, and dealer delivery charges.
For EV novated leases, vehicles must sit below this threshold to qualify for any FBT concession — whether the full exemption (Phase 1) or the 25% discount (Phases 2 and 3).
The threshold is indexed annually and has risen steadily, now capturing premium models that were previously above the cap. Always confirm the drive-away price on your quote against the current threshold.
Vehicles above the LCT threshold attract full FBT liability under a novated lease, significantly reducing the tax advantage compared to sub-threshold vehicles.
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