Widespread price reductions with new Luxury Car Tax threshold, but not from BMW

The introduction of a higher Luxury Car Tax threshold has meant lower prices for premium models across the board, but BMW buyers miss out.



The introduction of a new Luxury Car Tax threshold has meant widespread price reductions for new models.

However, BMW has chosen not to pass-on the savings, despite lower prices being offered by its competitors.

On 1 July 2020 – the beginning of the 2020/2021 Financial Year – the price at which the Luxury Car Tax (LCT) is applied to brand-new vehicles was increased from $67,525 to $68,740, in line with inflation.

LCT is calculated at 33 per cent on every dollar above the threshold, equating to a saving of roughly $401 for each vehicle.

That threshold rises to $77,565 for fuel efficient models, providing a saving of about $672.



While the cost savings were not always passed-on in their entirety, new-car buyers are still the beneficiaries among most popular brands.

Prices were reduced on models from Audi, Jaguar, Land Rover, Mercedes-Benz, and Porsche, as well as some Lexus vehicles, the Ford Mustang GT and R-Spec, and the Toyota Supra.

For Victorians, an additional ‘super luxury duty’ is applied above the LCT threshold, equating to 5.2 per cent up to $100,000, 7 per cent from $100,000 to $150,000, and 9 per cent for vehicles over $150,000.

BMW announced it would be raising prices across its model range in June 2020, with the 5 Series line-up following the trend in July 2020.



A statement issues to CarAdvice, BMW said: “In respect to the Australian Taxation Office’s revised Luxury Car Tax threshold for the 2020/21 financial year, BMW integrated the savings from this change into its recent pricing revision for applicable models”.

Despite year-to-date sales figures for BMW showing a 3.9 per cent decline compared to the first seven months of last year, in the month of July BMW recorded a 42.9 per cent drop in sales year-on-year.



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