Currently, a luxury car tax (LCT) is applied to vehicles priced above $65,094 (plus on-road costs), with the threshold for greener vehicles set at $75,526 (plus on-road costs).

There have long been claims that the LCT carries negative impacts by taxing safer and greener vehicles. However, with a free trade agreement being negotiated with Europe, the LCT may disappear.

Carsales has reported “The federal government’s negotiations with Europe on a free-trade agreement (FTA) is finally set to dismantle the much-maligned tax on European-built vehicles. According to stakeholders, this will likely lead to the abolition of the circa $600 million annual revenue-raiser altogether."