FBT exemption for Electric Vehicles passed

The FBT exemption for Electric Vehicles (EVs) has passed through parliament.

The exemption covers zero or low emission vehicles held and in use on or after 1 July 2022, with values below the luxury car tax threshold for fuel efficient cars (currently $84,916), being:

  • Battery electric vehicles

  • Hydrogen fuel cell electric vehicles

  • Plug-in hybrid electric vehicles (only if it can be recharged by an off-vehicle power source) – Exemption will end 1 April 2025 (existing arrangements before this date can continue)

Second-hand vehicles will qualify for the exemption if they meet the above-mentioned criteria and their first retail sale is on or after 1 July 2022.

 

Examples:

If you purchase a second-hand battery electric vehicle on 1 December 2022 and the EV was first purchased, held and in use from a retailer on 1 March 2022, the vehicle will not be eligible for the FBT exemption.

 

If you purchased a plug-in hybrid electric vehicle on 3 July 2022 and it was held and in use on 30 July 2022, you will be eligible for the FBT exemption.

Paul AbercrombieAbercrombie Accounting Group