April 27, 2026 in Sydney, Australia — The Luxury Car Tax (LCT) is one of Australia's most significant vehicle-related taxes, applying a 33% charge on the GST-inclusive value of cars exceeding certain price thresholds. For 2026-27, these thresholds sit at $71,544 for standard vehicles and $76,950 for fuel-efficient models — figures that catch a wide range of premium and luxury vehicles.
Understanding Luxury Car Tax in Australia
LCT was introduced in 2000 to replace the import tariff on luxury cars. It applies to cars with a GST-inclusive value above the relevant threshold. The tax is designed to ensure that luxury car buyers contribute more to the tax system, given that these vehicles often benefit from roads and infrastructure funded by general taxation.
The 2026-27 LCT Thresholds
| Vehicle Type | LCT Threshold | LCT Rate | Who Qualifies |
|---|---|---|---|
| Standard Vehicle | $71,544 | 33% of excess | All other vehicles |
| Fuel-Efficient Vehicle | $76,950 | 33% of excess | Fuel consumption ≤ 7L/100km |
Fuel Consumption and the Higher Threshold
To qualify for the higher fuel-efficient LCT threshold, a vehicle must have a combined fuel consumption of 7 litres per 100km or less. This includes:
- Many hybrid vehicles
- Small efficient turbocharged petrol engines
- Some diesel vehicles meeting the consumption standard
- Most plug-in hybrids (PHEVs)
Electric vehicles, while zero-emission at the tailpipe, have varying energy consumption ratings. The threshold applies based on energy consumption equivalence, not solely fuel consumption.
How to Calculate LCT
The LCT formula is:
LCT = (Vehicle Value - Threshold) × 33%
Example 1: Standard $90,000 Car
- Threshold: $71,544
- Amount above threshold: $90,000 - $71,544 = $18,456
- LCT: $18,456 × 33% = $6,090.48
- Total cost: $90,000 + $6,090.48 = $96,090.48
Example 2: $80,000 Fuel-Efficient Car
- Threshold: $76,950
- Amount above threshold: $80,000 - $76,950 = $3,050
- LCT: $3,050 × 33% = $1,006.50
- Total cost: $80,000 + $1,006.50 = $81,006.50
Example 3: $120,000 Luxury SUV
- Threshold: $71,544 (standard)
- Amount above threshold: $120,000 - $71,544 = $48,456
- LCT: $48,456 × 33% = $15,990.48
- Total cost: $120,000 + $15,990.48 = $135,990.48
Who Pays LCT?
LCT is technically paid by the supplier — the car dealer or importer — when they sell or import a luxury car. However, this cost is almost always factored into the advertised price and passed on to buyers.
For businesses:
- GST-registered businesses can claim a credit for LCT paid as part of their input tax credits
- This effectively reduces the LCT cost for business purchasers
- Private buyers cannot claim this credit
LCT Exemptions and Concessions
Disability Exemption
Cars purchased for use by a person with a disability who is eligible for the disability support pension may be exempt from LCT. Requirements include:
- The person must be eligible for the disability support pension
- A medical certificate from a doctor is required
- The exemption applies to one vehicle per eligible person
Diplomatic Exemption
Foreign diplomatic missions and accredited diplomatic staff may be exempt from LCT under international agreements.
Common Vehicles Caught by LCT
| Vehicle | Price (AUD) | LCT (Standard) | LCT (Fuel Efficient) |
|---|---|---|---|
| BMW 3 Series 330i | $87,900 | $5,397 | $3,613 |
| Mercedes-Benz C-Class AMG | $91,500 | $6,586 | $4,802 |
| Tesla Model Y Long Range | $72,490 | $312 | $0 (under FE threshold) |
| BMW X3 xDrive30d | $84,900 | $4,407 | $2,623 |
| Range Rover Sport | $131,900 | $19,917 | $18,133 |
| Audi Q7 55 TFSI | $109,900 | $12,657 | $10,873 |
| Lexus RX 500h | $94,200 | $7,477 | $5,693 |
Stamp Duty: A Second Tax on Cars in Australia
On top of LCT, most Australian states and territories charge stamp duty on vehicle purchases:
| State | Stamp Duty Rate | Notes |
|---|---|---|
| NSW | $3 per $100 (new), $2 per $100 (used) | Motor vehicle duty |
| VIC | $8.40 per $200 ($4.20 per $100) | Motor duty |
| QLD | $5 per $100 | Transfer duty |
| WA | $2.75 per $1,000 | Transfer duty |
| SA | $2.50 per $1,000 | Transfer duty |
| TAS | $4 per $100 | Duty on transfers |
| ACT | $1.50 per $100 ($1.40 per $100 under $50k) | Payable duty |
| NT | $3 per $100 | Stamp duty |
Total Tax on a $100,000 Car
For a $100,000 car purchased in NSW:
- GST (10%): $9,091 on $100,000
- LCT: ($100,000 - $71,544) × 33% = $9,390
- Stamp duty: $100,000 × 3% = $3,000
- Total tax: $21,481
- Pre-tax price equivalent: $121,481
Conclusion
Australia's Luxury Car Tax adds a significant cost to premium vehicles. With a 33% rate on value above the threshold, a $100,000 car can attract over $9,000 in LCT alone. Use our Car Tax Calculator to estimate total costs for Australian vehicle purchases.
Disclaimer: LCT thresholds are for 2026-27 financial year. Confirm with ATO before purchasing.
Official Resources: ATO | LCT Information