Luxury car tax: what is the luxury car tax threshold and the fuel-efficient car limit for the 2014-15 financial year?

The luxury car tax (LCT) threshold and the fuel-efficient car limit are determined in accordance with Division 25 of the A New Tax System (Luxury Car Tax) Act 1999 (LCT Act).

The LCT threshold is indexed annually according to a factor to be determined by Parliament or, if such a factor is not determined by Parliament, indexed annually in accordance with movements in the All Groups Consumer Price Index (All Groups CPI). [1]

Parliament has not determined an indexation factor, so for the 2014-15 financial year the LCT threshold will be indexed in accordance with movements in the All Groups CPI unless the indexation factor is 1 or less. [2]

For the 2012-13 financial year the index was 406.6 and for 2013-14 financial year this index was 417.0 [3] resulting in an indexation factor of 1.026. For the 2013-14 financial year, the LCT threshold was $60,316. [4] The LCT threshold for the 2014-15 financial year is $61,884 ($60,316 x 1.026).

The fuel efficient car limit is indexed annually in line with movements in the motor vehicle purchase sub-group of the CPI, [5] unless the indexation factor is 1 or less. [6]

For the 2012-13 financial year this index was 395.1 and for the 2013-14 financial year the index was 384.6 [7] resulting in an indexation factor of 0.973. As the indexation factor is less than 1, the fuel-efficient car limit will not be indexed. For the 2013-14 financial year, the fuel-efficient car limit was $75,375. [8] The fuel-efficient car limit for the 2014-15 financial year remains at $75,375.

This Determination applies to the financial year commencing 1 July 2014.