The Federal Chamber of Automotive Industries has rightly called for the abolition
of Luxury Car Tax after Treasurer Jim Chalmers announced this week a
tightening of conditions surrounding fuel-efficient vehicles to take effect from
July 1, 2025. The current tax-free threshold for luxury car tax of 33 per cent
applies to fuel-efficient vehicles over $89,332 and for all other vehicles over
$76,950. A fuel-efficient car is currently defined as one that doesn’t use more than
7 litres/100km. However, from July 1, 2025, the Government has moved to drop
this to 3.5 litres/100km which will see a lot of previously exempt diesel, petrol, and
hybrid vehicles hit by the luxury car tax. The luxury car tax was originally created to
protect our local vehicle manufacturing industry, however, local manufacturer
wound up in 2017 at which point the tax should have been scrapped.

Download this podcast here