When the Federal Government introduced the Frige Benefits Tax (FBT) exemption for electric vehicles (EVs) in July 2022 it couldn’t have foreseen the surge in demand for EVs we’ve been seeing with higher fuel prices due to the war in Iran.
If the cost of fuel has you considering an electric vehicle as your next car purchase, you can still take advantage of the full FBT exemption for eligible electric vehicles until 31 March 2027.
From April 2027, EVs priced at $75,000 or less will keep the full exemption, while more expensive EVs move to a reduced 25 per cent FBT rate.
From April 2029 onwards, all eligible EVs then transition to the permanent 25 per cent FBT discount, replacing the headline exemption but still treating electric vehicles far more favourably than petrol or diesel cars.
The takeaway? EV salary packaging remains attractive for those who can afford it, particularly for sub‑$75,000 vehicles and people already considering an EV. If this is you, you may benefit from locking in arrangements before the rules tighten.
But before you rush out to buy or lease a new vehicle, be sure to do the sums.
Novated leases may present as an affordable and tax-effective way to purchase a new vehicle – but be clear on how much a new car will be costing you and make sure you understand all the terms and conditions before entering into any contract. As always, it pays to compare costs and read the fine print.
Speaking with a financial advisor can help you make more informed decisions before any major purchase. To make an appointment, call me at Align Financial on (02) 9913 9995.
