Are you looking to buy a car that is worth more than $64,000? If so, there are some special rules in regards to tax and novated leases that you need to consider.
The Australian Tax Office regards any passenger vehicle with a purchase price of $64,132 or more as a “luxury” vehicle. In 2017 that’s not a lot of car.
For those who consider the environment with every purchase the threshold is $75,526 for fuel-efficient cars (those with a fuel consumption of seven litres per 100 kilometres or less).
So if you were looking at a BMW M3 or Porsche 911 as a novated lease option you may need to do a little more research because lots of things change once the purchase price soars above $64k.
Once a vehicle is deemed “luxury” the financier is limited to the amount of GST credits they can claim and lease payments on luxury vehicles aren’t fully tax deductible. This changes the way savings are calculated compared to buying the car yourself.
For the detailed orientated people you can get the what, why and how from the ATO website.
