Electric vehicles (EVs) are becoming increasingly attractive options for Australian drivers, especially when combined with novated leases. Recent changes in tax regulations and the growing availability of EVs have created new opportunities for significant savings.
- FBT Exemption:
- Eligible electric cars are exempt from Fringe Benefits Tax (FBT) when provided through a novated lease
- Exemption applies to cars first held and used after July 1, 2022
- Includes zero and low-emission vehicles below the luxury car tax threshold
- Cost Savings:
- FBT exemption can lead to substantial savings compared to conventional vehicles
- Lower running costs of EVs contribute to overall savings
- Eligibility Criteria:
- Car must be a zero or low emissions vehicle
- First held and used after July 1, 2022
- Used by current employees or their associates
- Luxury car tax never payable on the car
- Plug-in Hybrid Considerations:
- Plug-in hybrids eligible until March 31, 2025
- Actual electricity expenses must be calculated for charging
- Reportable Fringe Benefits:
- Despite FBT exemption, benefits are still reportable
- Notional taxable value needs to be calculated
- Environmental Impact:
- EVs produce zero tailpipe emissions, contributing to cleaner air
- Reduced greenhouse gas emissions compared to conventional vehicles
Combining an EV with a novated lease offers a unique opportunity for Australian drivers to save money while contributing to environmental sustainability. As the EV market continues to grow and tax incentives remain in place, this option becomes increasingly attractive for both employees and employers.
