On 24 April 2026, across Australia, buyers purchasing high-value vehicles need to understand exactly how luxury car tax is calculated In 2026, calculating luxury car tax australia 2026 formula . The calculation is straightforward but requires knowing the correct threshold, vehicle type, and the 33% rate applied by the ATO.

For more information, visit the Car Tax Payment Guide.

calculating luxury car tax australia 2026 formula — 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%

calculating luxury car tax australia 2026 formula — 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)

calculating luxury car tax australia 2026 formula — 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

calculating luxury car tax australia 2026 formula — 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.

calculating luxury car tax australia 2026 formula — 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.

calculating luxury car tax australia 2026 formula — 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.

ATO - Australian Taxation Office - Luxury Car Tax

For official information, visit SGI Saskatchewan, SAAQ Quebec.

Key Points to Remember

When planning your vehicle purchase, it is important to consider all applicable taxes and fees. Provincial sales tax rates, federal goods and services tax, and any luxury taxes on high-value vehicles can significantly affect the total cost. Research your specific province and vehicle type before making a purchase decision.

Common Questions

Many vehicle buyers have questions about tax rates and exemptions. Understanding when provincial sales tax applies, how trade-in values affect the tax base, and which vehicle types qualify for exemptions can save you thousands of dollars. Consult your provincial vehicle registry or a tax professional for specific advice.

When purchasing a vehicle, it is important to understand all applicable taxes and fees in your province or state. Provincial and federal taxes can add significant costs to your vehicle purchase. Research current rates, exemptions, and registration requirements before buying.

When purchasing a vehicle, it is important to understand all applicable taxes and fees in your province or state. Provincial and federal taxes can add significant costs to your vehicle purchase. Research current rates, exemptions, and registration requirements before buying.