Australians who buy hybrid cars will be hit by the Labor government's luxury car tax on vehicles that still run on petrol, as the Daily Mail reported on May 15.
The new luxury car tax rules will come into effect on 1 July 2025, meaning that cars priced between $76,950 and $89,332 will be subject to the luxury car tax, unless the car consumes less than 3.5 litres per 100 kilometres.
Hybrid cars typically consume more than 5 litres of fuel per 100 km, which means they will also be subject to a 33% luxury car tax.
(Image source: Daily Mail)
This will be a blow to those who buy the likes of the $80,230 Toyota Kluger, the $88,800 Mazda CX-60 and the $87,500 Lexus RX 350h.
As part of a plan to reduce carbon emissions by 43% by 2030, the Labour government has sought to encourage drivers to buy all-electric luxury cars like the Tesla Model Y by penalizing hybrid, petrol and diesel car owners.
The Budget forecasts that the luxury car tax will raise $1.2 billion for the government in 2025/26, to $1.27 billion in 2026/27 and $1.33 billion in 2027/28.
Under the current rules, fuel-efficient luxury cars priced above $76,950 are exempt from the 33% tax if they consume less than 7 litres per 100 kilometres. This benefits consumers who buy luxury hybrid cars or small petrol vehicles.
(Image source: Daily Mail)
In 2023/24, the luxury car tax threshold is $89,332 for fuel-efficient vehicles, but $76,950 for other non-fuel-efficient vehicles, which is indexed for inflation each financial year.
The changes to the luxury car tax, which will come into effect on 1 July 2025, will hurt those who have purchased a Lexus RX 350h front-wheel drive hybrid, as the model is priced at $87,500 and consumes 5 litres of fuel per 100km. But BMW will benefit, with the all-electric iX1 SUV sold by the latter for $85,624.
Tesla will also be the biggest beneficiary of the change, with some models of its Model Y SUV priced between the general and energy-efficient luxury car tax thresholds, including the Long Range All-Wheel Drive model, which costs $81,900.
Just a few months later, Anthony Albanese's government will introduce the New Vehicle Efficiency Standard, which aims to cut vehicle emissions by 59% in just four years and impose fines on sellers of gasoline, diesel and even hybrid vehicles.
The picture and text have nothing to do (Image source: Internet)
The Treasury estimates that the changes to the relevant GST and duty will add $123.3 million to the government's revenue in 2024/25, but will lose $388.7 million in revenue over the five-year period from 2023-24 to 2027-28.
"This was mainly due to a decrease in fuel excise tax revenues due to the introduction of new vehicle efficiency standards," the report said. ”
The plan, which is scheduled to come into force on January 1, 2025, aims to reduce the average carbon emissions of passenger cars to 58 grams per kilometre by 2029 as part of Labour's plan to reduce carbon emissions by 43% by 2030, a 59 per cent reduction compared to the 2025 target of 141 grams per kilometre.
Sellers of light commercial vehicles, including pickup trucks and four-wheel drive vehicles, will be required to reduce emissions by 47.6% from 210 grams per kilometer in 2025 to 110 grams per kilometer by 2029.