12:49 16-02-2026

Australia could remove luxury car tax and import tariffs

Reports indicate that Australia's luxury car tax may be scrapped as negotiations with Europe over a long-discussed free trade agreement reportedly near their final stages.

The Luxury Car Tax (LCT) is a 33 percent levy applied to every dollar of a new car's value above a threshold. For models with a claimed fuel consumption of 3.5L/100km or less—including electric vehicles and most hybrids—the threshold is $91,387. For all other cars, it's $80,567.

In addition, a 5 percent import tariff on most European cars sold in Australia is expected to be eliminated. This barrier does not apply to vehicles manufactured in Japan, Thailand, South Korea, and China.