To work out the luxury car tax (LCT) amount you must pay if you sell a car, use the following formula:
(LCT value − LCT threshold) × 10 ÷ 11 × 33%.
Like other business taxes, you report and pay LCT on your activity statement.
The LCT value is the retail price of the car, including:
- GST and any customs duty
- dealer delivery charges
- standard and statutory warranties
- additional items, such as accessories, modifications and treatments to the car before delivery or under an arrangement with the supplier or an associate of the supplier. These inclusions may be made at or before the time of delivery (unless made solely for the purpose of adapting it for driving by, or transporting, a person with a disability)
- fleet rebates, run-out model support incentive payments and any other motor vehicle incentive payments that are third-party consideration.
The LCT value does not include:
- LCT included in the sale
- other Australian taxes, fees or charges such as stamp duty, transfer fees and registration
- compulsory third-party insurance (CTPI)
- extended warranties
- costs associated with financing the purchase of the car
- service plans.
Work out your LCT rate and threshold.
If LCT has already been paid on the car, you can reduce the amount you pay by the amount of LCT already paid.
Example: working out the LCT you must report and pay
Matty Bee Motors (MBM) sells a car (not qualifying as fuel efficient) worth $88,000 including GST. The LCT value of the car is more than the LCT threshold ($80,567 for the 2024–25 financial year) so MBM must pay LCT on the sale of the car.
To work out the amount of LCT:
(LCT value − LCT threshold) × 10 ÷ 11 × 33%
($88,000 − $80,567) × 10 ÷ 11 × 33%
$7,433× 10 ÷ 11 × 33%
= $2,229.
MBM charges the customer $90,229 ($88,000 including GST plus $2,229 LCT) for the car, excluding stamp duty, CTPI, registration and other charges.
MBM reports and pays $2,229 LCT on their next activity statement.
End of exampleFor motor vehicle incentive payments, use the examples to help you work out GST.