Luxury Car Tax Australia: What Every Supercar Buyer Should Know (2025 Edition)

What is the Luxury Car Tax Australia (LCT)?

The Luxury Car Tax (LCT) is a federal tax applied when a car’s GST-inclusive value exceeds a specific threshold. In short: you don’t pay the LCT on the entire price, only on the portion above that threshold.

For the 2025–26 financial year, the thresholds are:

• $91,387 for fuel-efficient vehicles

• $80,567 for all other vehiclesThe rate is 33% on the amount that exceeds those limits.(Source: Australian Taxation Office)

Front view of a Ferrari 12 Cilindri at Rennauto Brisbane for the Luxury Car Tax Australia article.

Why the Luxury Car Tax Hits Supercars the Hardest

Originally designed to protect Australia’s domestic car industry from luxury imports, the LCT has long outlived its original purpose. Now, it mainly impacts buyers of premium and exotic cars: precisely the world Rennauto operates in.

For high-performance brands like Ferrari, Lamborghini, and McLaren, even standard configurations exceed the LCT threshold. Add bespoke options, carbon packages, or personalisation, and the tax impact climbs fast.

Close-up of Ferrari 12 Cilindri rear design featured in Rennauto’s Luxury Car Tax Australia guide.

Close-up of Ferrari 12 Cilindri rear design featured in Rennauto’s Luxury Car Tax Australia guide.

Could the Luxury Car Tax Be Abolished?

There’s increasing pressure from the industry to phase out the LCT.

• The AADA and Motor Trades Association both describe it as outdated.

• Trade talks between Australia and the EU have included discussions about reforming or removing it.

• Realistically, a gradual phase-out is more likely than a sudden repeal, to prevent disruption in resale values and market pricing.

If the LCT were removed, new exotic cars would instantly become more accessible, potentially boosting demand. However, recent buyers might see downward pressure on resale values.

Detail of a Ferrari 12 Cilindri wheel for the Luxury Car Tax Australia article.

Ferrari 12 Cilindri logo detail featured in the Luxury Car Tax Australia article.

Front view of a McLaren 570S at Rennauto Brisbane, for the Luxury Car Tax Australia article.

Interior detail of a Porsche 911 992 GTS used in Rennauto’s Luxury Car Tax Australia guide.

Final Thoughts: The Luxury Car Tax and the Supercar Market

For supercar enthusiasts and investors, understanding LCT is essential. It affects pricing, financing, and resale, and ignoring it can mean overpaying, or mistiming a sale.

Speak with our team at Rennauto Brisbane: we’ll help you understand how upcoming changes to Luxury Car Tax may influence market values and find the right strategy for your next supercar purchase or consignment.

Contact us