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Luxury Car Tax

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Here is your scrumptious guide on luxury car tax (LCT) and some great tips to avoid tax when you purchase any new luxury cars. Do no overlook the car tax when you purchase a new car especially in some country like Australia, Columbia, UK, United States, Thailand, or Malaysia that has special tax for luxury cars or import cars. It should be one of the consideration when thinking to buy a new car. You could save up thousands of dollars at the end of the day if you make a wise decision and buy the best luxury car that falls into your grips.

LCT is a tax within the Australian taxation system where anyone who run a car business purchase or import luxury cars to Australia, they are require to pay the car tax according to the given car tax rate.

In Australia, the tax for luxury cars is 33% as of 02 July 2010 and it is payable to the Australian Tax Office for any cars that exceeds the price of AUD$57,466 (around US$48,500 for the 2010-2011 financial year). The luxury car tax payable amount is not based on the full price of the vehicle.

How to calculate these tax?

LCT is charged in addition to the Goods & Services Tax (GST). To calculate the LCT, you will need use the formula: LCT = (GST inclusive price – $57,466) * (10/11) * 33%

For example a luxury car with GST inclusive price is $100,000, the calculation will be:
LCT = ($100,000 – %57,466) * (10/11) * 33% = $12,760.20
In this case, the total amount you will have to pay including the vehicle price will be $112,760.20.

Before July 1, 2008, LCT in Australia is only 25% but it has increased 8% from 25% to 33% from July 1, 2008. Imagine you bought a $100,000 car in 2008 the LCT is $9744.75 compared to $12,760.20, the difference is $3015.45. Imagine this is what you can save by choosing the right time to purchase a new luxury car.

However, in some cases some luxury cars is tax free even the vehicle price is over $57,466. These are cars that supplied over two years following the local build date, campervan or motor home, commercial car that is not designed for the principal purpose of carrying passengers, or vehicle supplied by private sale. In conclusion, choose the right time to buy the right car will give you a big savings especially on tax.

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