Luxury Car Depreciation Tax Limits 2018

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Luxury Car Limit for Depreciation purposes

The luxury car tax limit for depreciation purposes under section 40-230 of the Income Tax Assessment Act 1997 for the FY 2017-18 is $57,581. This limit also applies for depreciation purposes to fuel efficient cars.

Example

A Caulfield accountant purchases a hybrid Mercedes Benz at a value of $75,000 in July 2017. The car is depreciated at a reduced cost base initial value of $65,094.

Luxury car tax threshold

Luxury car tax is the 33% tax imposed on the GST inclusive purchase price of luxury cars over the luxury car tax threshold. The luxury car tax threshold for the 2017-18 year is $65,094 which was provided for in a luxury car tax determination LCTD 2017/1.

For fuel-efficient cars the threshold remains at $75,526.

Contact Hillyer Riches Tax Accounting Firm Caulfield or for more information email travis@hillyerriches.com.au.

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This article is for general information only and should not be relied upon without first seeking advice from an appropriately qualified professional.

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