Luxury Car Tax - thoughts

[Coastr]

^exactly - lct severely reduces supply of Porsches in Australia and keeps used prices higher than they should be.  Parallel import bans and LCT on imports restricts the ability to increase the supply by importing used cars.  This makes values higher and enthusiasts less able to access the cars they want.

[edgy]

21 hours ago, sleazius said:

Ban transfer pricing and base tax for known tax dodgers like Google and Apple on revenue. Problem solved.

Every tax issue that politicians (and industry) claims are insurmountable because of x, y and z are so easily fixed it is ridiculous. "I have a vested interest in not fixing this problem because of the 7 figure corporate gig I'm going to be handed when I retire from politics"

I also agree - its not SME and small business making 5-30% margins that are the tax issue, It is the corporations making a mockery of the tax system. Apple with their $11B in revenue and paying $100M in tax in Australia for example. Who would have thought that a phone that has $130 in parts in it but is sold for $2500 would require such huge overheads to get it into the hands of customers. There must be some fantastically wealthy logistics or Apple genius bar employees getting around.

Largest company in the world can only manage 0.9% margin in Australia. Makes sense to me!

 

 

Totally!! 
 

2 hours ago, Shane911 said:

While we might not directly pay the LCT, we are still heavily affected by it as it has a significant impact on the price of used cars, eg if the LCT was abolished, the price of a brand new $400k Porsche would fall by ~$108k or 27%, this would flow through to the used car market as well, as no one is going to pay more for a used than they would for a brand new car.

 

For sure, however I feel this would be more applicable to later model cars than the 10+ year old market… however what @Coastr states below regarding restrictions on imports (supply) would probably have a more broad effect. 

 

1 hour ago, Coastr said:

^exactly - lct severely reduces supply of Porsches in Australia and keeps used prices higher than they should be.  Parallel import bans and LCT on imports restricts the ability to increase the supply by importing used cars.  This makes values higher and enthusiasts less able to access the cars they want.

100% 

[Moobs]

Dumb question alert - is LCT payable on classic imports (older than 25 years)?

Thinking about importing a 993 and can't find this anywhere. Going by the ABF exemptions list, the answer is yes.

[OBRUT]

1 hour ago, Moobs said:

Dumb question alert - is LCT payable on classic imports (older than 25 years)?

Thinking about importing a 993 and can't find this anywhere. Going by the ABF exemptions list, the answer is yes.

Yep. 

[Coastr]

Try and find a ratty one with a low purchase price, then import all the parts you need lct free

[sleazius]

59 minutes ago, Coastr said:

Try and find a ratty one with a low purchase price, then import all the parts you need lct free

Same reason that most utes crash through the front door of ARB the second they're bought.

[edgy]

7 minutes ago, sleazius said:

Same reason that most utes crash through the front door of ARB the second they're bought.

I was recently looking at new Ute prices… my god! I did not know you could clock up a $100k on a hilux, amarok, ranger etc 😵‍💫

No wonder the ATO wants to start getting some FBT from those getting personal use out of their utes! 

[sleazius]

19 minutes ago, edgy said:

I was recently looking at new Ute prices… my god! I did not know you could clock up a $100k on a hilux, amarok, ranger etc 😵‍💫

No wonder the ATO wants to start getting some FBT from those getting personal use out of their utes! 

To be fair the LCT limit is ridiculous. Biggest case of bracket creep ever. I can't find it, but I'm pretty sure it was about $57k when it was introduced, and this was only indexed finally in 2012 after 12 years. Not including this year's crazy inflation the threshold should be $95k per the RBA calculator here: https://www.rba.gov.au/calculator/annualDecimal.html - which means the fuel efficient threshold should be $110k-ish.

That of course is assuming that it should even exist in the first place.

 

 

 

 

[Coastr]

Utes - well, if every man and his dog wasn’t getting a tax break for running a family car as a ‘commercial vehicle’ they wouldn’t be the top selling vehicle.  The tax office distorts what people will go for.  Used to be back in the day the company car was a falcodore and was a nice way of avoiding getting scalped.  They shut that off with FBT and set the long decline in motion.  Then gst and tax write offs for utes and the manufactures discover nobody is actually carrying anything much around anyway so the trays shrink and the passengers grow and now the dual and fly out the door.

 

don’t get me wrong I love a good pickup (note I didn’t say ute!) but it’s crazy the way differential tax treatments distort the car market.  

[sleazius]

44 minutes ago, Coastr said:

don’t get me wrong I love a good pickup (note I didn’t say ute!) but it’s crazy the way differential tax treatments distort the car market.  

Unintended consequences and all that.

One of my favourite market distortions from the past was this ripper: https://en.wikipedia.org/wiki/Window_tax

[edgy]

14 hours ago, Coastr said:

Utes - well, if every man and his dog wasn’t getting a tax break for running a family car as a ‘commercial vehicle’ they wouldn’t be the top selling vehicle.  The tax office distorts what people will go for.  Used to be back in the day the company car was a falcodore and was a nice way of avoiding getting scalped.  They shut that off with FBT and set the long decline in motion.  Then gst and tax write offs for utes and the manufactures discover nobody is actually carrying anything much around anyway so the trays shrink and the passengers grow and now the dual and fly out the door.

 

don’t get me wrong I love a good pickup (note I didn’t say ute!) but it’s crazy the way differential tax treatments distort the car market.  

Exactly... really good point! I do recall the days when you could have a commodore wagon and fully deduct it. 

Now, it is very limited, however I can go all out on say, an Amarok W580 or Ford Ranger Raptor and not have to account $0.01c of personal use! Here I was wondering why all these locals are driving new Dodge RAM trucks around the suburbs  turns out I am the idiot! 

18 hours ago, sleazius said:

To be fair the LCT limit is ridiculous. Biggest case of bracket creep ever. I can't find it, but I'm pretty sure it was about $57k when it was introduced, and this was only indexed finally in 2012 after 12 years. Not including this year's crazy inflation the threshold should be $95k per the RBA calculator here: https://www.rba.gov.au/calculator/annualDecimal.html - which means the fuel efficient threshold should be $110k-ish.

That of course is assuming that it should even exist in the first place.

 

Also a very good point... you can easily nudge $50k in a small hatchback now i.e. Corolla, Mazda 3

[sleazius]

1 hour ago, edgy said:

Exactly... really good point! I do recall the days when you could have a commodore wagon and fully deduct it. 

Now, it is very limited, however I can go all out on say, an Amarok W580 or Ford Ranger Raptor and not have to account $0.01c of personal use! Here I was wondering why all these locals are driving new Dodge RAM trucks around the suburbs  turns out I am the idiot! 

 

Also a very good point... you can easily nudge $50k in a small hatchback now i.e. Corolla, Mazda 3

Interesting thing about the RAMs as I just bought one - to get it under the GVM limit for a standard license in Australia they had to down rate them from 5.3T GVM to 4.45T which means the payload on the 2500 diesel is below 1 Tonne, and therefore doesn't qualify for the ATOs definition of a work vehicle. So a 6.7L diesel truck engine with a 5.3T axle load rating as standard isn't a work vehicle for tax purposes . They also have only an 8T towing capacity in Australia on the same hardware that they allow 26T in the US.

None of this stops people claiming them 100% up to the $150k limit, but you'd lose an audit unless you had a GVM conversion (completely unnecessary but necessary for road and tax rules) done by a 3rd party manufacturer.

Totally bloody ridiculous but the RAMs are a good example of two market distortions working against each other.

[Oldknees]

Yep in theory anything that can’t carry a tonne could be subject to FBT (which is different from LCT ). Anything outside the 1 tonne (ie a 911), is subject to FBT of 20% of purchase price annually less business use %. It’s a bit more complicated than that but this is a car forum!
 

Thing is, most dual cab utes are not rated to carry a tonne & most people at the moment are getting away claiming them as FBT exempt. 

[edgy]

That I didn’t know @sleazius I guess you’re right though, they probably run at 100% deduction, but should they be audited, they’ll lose! 
 

So G300 Professional utility it is! 😂

[Coastr]

I have an f250…but I don’t have an operating business anymore .. maybe I should talk to my accountant tax deduction the fuel sure would be handy

[on_booost]

3 things - probably not worth much.

1 - We get the Politicians we deserve. Read that again.

2 - All these utes (Rams, Raptors, Hilux etc) are NOT subject to LCT - they are considered a Commercial vehicle - and therefore exempt.

3 - The 1 Tonne payload limit has ALWAYS had exceptions... Primarily to protect the  local industry at the time (basically Falcadore utes) 

Simon

[sleazius]

1 hour ago, edgy said:

That I didn’t know @sleazius I guess you’re right though, they probably run at 100% deduction, but should they be audited, they’ll lose! 
 

So G300 Professional utility it is! 😂

Ram Dealer: "never heard of anyone not claiming the $150k" ... my accountant different story. You think the ATO will side with old mate at the car yard? 🤣

[edgy]

2 hours ago, sleazius said:

Ram Dealer: "never heard of anyone not claiming the $150k" ... my accountant different story. You think the ATO will side with old mate at the car yard? 🤣

Ha! I’m with you mate, we go by the book… I don’t it’s wise to do otherwise!