Dealers are advised that the Australian Taxation Office (ATO) had announced the Luxury Car Tax (LCT) thresholds for the financial year 2026-27.
This bulletin is a reminder for dealerships and their staff to familiarise themselves with the implications of the 2026-27 LCT thresholds and the new definition for a fuel-efficient vehicle, which take effect from 1 July 2026. Dealers are encouraged to consider seeking appropriate professional taxation advice from their preferred taxation and/or professional services firm. Dealers are also encouraged to make the appropriate changes to their Dealer Management Systems.
The Consumer Price Index (CPI) indexation factor for the 2026-27 financial year is 1.003. Therefore, the car limit and the luxury car tax threshold for both fuel-efficient vehicles and other vehicles will increase.
| LCT Thresholds | ||
| Financial year | Fuel efficient vehicles | Other vehicles |
| 2026-27 | $91,661 | $80,809 |
| 2025-26 | $91,387 | $80,567 |
| 2024-25 | $91,387 | $80,567 |
Dealers can read the ATO’s definition of a Fuel Efficient Vehicle here.
More information on the LCT thresholds and calculation of the LCT can be found on the ATO website below.