FAQ: How is Luxury Car Tax (LCT) calculated?

How is Luxury Car Tax (LCT) calculated?

The amount of Luxury Car Tax (LCT) payable on the purchase of a car depends on the amount by which the car's price exceeds the Luxury Car Tax threshold.

The LCT payable on a car is 33% of the GST-exclusive portion of the car's price (including GST but excluding government fees and charges such as stamp duty, registration & CTP) exceeding the Luxury Car Tax threshold.

The amount of LCT payable on a car (added to its price by a dealership to calculate the total sale price of the car to a buyer) can be calculated in four simple steps:

  1. Calculate the supply price of the car including GST and excluding government fees & charges (typically stamp duty, registration & CTP).
  2. Calculate the portion of the car's price that exceeds the LCT threshold - subtract the LCT threshold from the car's supply price (calculated in step 1).
  3. Divide this value by 1.1 to exclude the GST from the value of the car's supply price that exceeds the LCT threshold (calculated in step 2).
  4. Calculate the LCT payable by multiplying the GST-exclusive value of the car's supply price that exceeds the LCT threshold (calculated in step 3) by the LCT rate (33%).

Read our LCT Explained article to find out more about how LCT is calculated, or use our LCT Calculator to calculate the LCT included in the purchase price of your next car.