On 24 April 2026, across Australia, buyers purchasing high-value vehicles need to understand exactly how luxury car tax is calculated. The calculation is straightforward but requires knowing the correct threshold, vehicle type, and the 33% rate applied by the ATO.
The Luxury Car Tax Formula
The luxury car tax calculation follows a simple three-step formula:
Step 1: Identify the applicable LCT threshold for your vehicle type
Step 2: Subtract the threshold from your GST-inclusive vehicle price
Step 3: Multiply the difference by 33%
LCT = (Vehicle Price - Threshold) x 33%
2026 LCT Thresholds
Before calculating, confirm which threshold applies to your vehicle:
- AUD 89,332: Standard threshold for fuel-powered vehicles (petrol, diesel, hybrid)
- AUD 91,316: Higher threshold for electric vehicles (introduced July 2022)
Step-by-Step Calculation Examples
Example 1: AUD 95,000 Petrol Vehicle
- Vehicle price: AUD 95,000
- Threshold: AUD 89,332
- Amount above: AUD 5,668
- LCT: AUD 5,668 x 33% = AUD 1,870.44
Example 2: AUD 130,000 Electric Vehicle
- Vehicle price: AUD 130,000
- Threshold: AUD 91,316
- Amount above: AUD 38,684
- LCT: AUD 38,684 x 33% = AUD 12,765.72
Example 3: AUD 85,000 Petrol Vehicle
- Vehicle price: AUD 85,000
- Threshold: AUD 89,332
- Amount above: AUD 0 (below threshold)
- LCT: AUD 0 — No LCT applies
What Price Is Used in the Calculation?
The LCT is calculated on the GST-inclusive price of the vehicle. This includes:
- Base vehicle price
- Dealer delivery and handling charges
- Any additional accessories or options fitted before delivery
- GST (10%) already added to the pre-tax price
The price does not include stamp duty, registration, or CTP insurance, which are added separately.
Special Cases in LCT Calculation
Trade Vehicles
When purchasing a vehicle as a trade-in, the LCT is calculated on the new vehicle price only, not the net amount after trade. The trade-in value does not reduce the LCT liability.
Imported Vehicles
For imported vehicles, the customs value including shipping and insurance is used as the starting point, then GST and LCT are calculated on that base.
Company Cars
Company vehicles purchased above the threshold attract LCT in the same way as private purchases. The company cannot claim the LCT as a credit against GST collected.
Summary
Calculating luxury car tax is straightforward: subtract the threshold from your GST-inclusive vehicle price, then multiply by 33%. Use AUD 89,332 for fuel vehicles and AUD 91,316 for electric vehicles. Vehicles below threshold pay no LCT.