From 1 July 2022 the following car threshold amounts apply:
There’s an upper limit on the cost the taxpayers use to work out the depreciation for the business use of car or station wagon, including four-wheel drives. They need to use the car limit that applies to the year the car is first used or leases.
The car limit for 2022–23 is $64,741.
Goods and services tax (GST)
Generally, when a car is purchased and the price is more than the car limit, the maximum amount of GST credit that can be claimed is one-eleventh of the car limit amount currently $5,885.
GST credit can’t be claimed for any luxury car tax paid when a luxury car is purchased, regardless of how much the car is used in carrying on the business.
Luxury car tax
From 1 July 2022 the luxury car tax threshold for luxury cars increased to $71,849.
The threshold for fuel efficient luxury cars for the 2022–23 financial year increased to $84,916.
In general, the value of a car includes the value of any parts, accessories or attachments supplied or imported at the same time as the car.
For more details and specialist tax advise feel free to contact our friendly accountants at Tax Focus in Bondi Junction.