Australia may scrap luxury car tax in EU free trade deal
Australia could remove luxury car tax and import tariffs
Australia may scrap luxury car tax in EU free trade deal
Australia's luxury car tax might be scrapped as free trade talks with Europe progress, potentially lowering prices for new cars and EVs.
2026-02-16T12:49:13+03:00
2026-02-16T12:49:13+03:00
2026-02-16T12:49:13+03:00
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.
Australia luxury car tax, EU free trade agreement, car import tariffs, electric vehicle tax, automotive news
2026
Michael Powers
news
Australia could remove luxury car tax and import tariffs
Australia's luxury car tax might be scrapped as free trade talks with Europe progress, potentially lowering prices for new cars and EVs.
Michael Powers, Editor
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.
