Thinking about a smart electric vehicle? Your timing couldn’t be better. Thanks to the Federal Government EV Discount, the affordability of eligible electric and plug-in hybrid vehicles is improving for working Australians. Through novated leasing, you could be paying for a car using pre-tax dollars, potentially saving you thousands on tax over the lifetime cost of the car.
A novated lease is a three-way agreement between you, your employer, and a finance company that allows you to lease a car. Your employer deducts money from your before-tax and/or after-tax pay to cover vehicle payments and running costs, which could help to reduce your taxable income, and in turn, increase your disposable income.
Ordinarily, under a novated lease vehicle you are required to pay some Fringe Benefits Tax (FBT). However, with the Federal Government EV Discount, eligible electric and plug-in hybrid vehicles up to the Luxury Car Tax threshold of $91,387 are FBT-free! This means that 100% of payments made towards your lease and running costs using your pre-tax salary are FBT-free.
