Luxury Car Tax: What’s Actually Happening?

Media speculation is one thing. But here’s what you really need to know.

If you've seen the recent headlines about the Luxury Car Tax (LCT) being scrapped, you're not alone. It’s sparked a lot of interest—and understandably, some confusion. But while the idea might be exciting for those in the market for a new vehicle, here’s the bottom line:

There’s been no official change to the LCT.

The Australian Automotive Dealer Association (AADA) has addressed the speculation, and we’re here to pass on the facts—no fluff, no hype.

So, where did the rumours come from?

Recent media reports suggested that as part of renewed negotiations for a free trade agreement with the European Union, the Australian Government might consider removing the LCT. It’s true that the tax has been a sticking point in past discussions, particularly with European manufacturers.

But as AADA points out, this is not a new conversation. The potential to remove or reform the LCT has been raised multiple times over the years—and so far, nothing has changed.

What is the Luxury Car Tax?

LCT is an additional tax applied to certain new vehicles priced above the government’s LCT threshold. It was originally introduced when Australia still manufactured its own cars—to protect local industry. But those days are gone, and many now see the LCT as outdated.

AADA has long opposed the tax and continues to lobby for its removal in a way that supports both the automotive industry and consumers.

What does this mean for buyers right now?

The LCT still applies to many new vehicles—particularly higher-spec SUVs, 4WDs and premium passenger models. That includes some Toyota favourites, depending on their use and pricing.

There’s no legislation, policy change or confirmed removal on the table yet. And with trade negotiations being complex and long-running, any actual change to LCT—if it comes—won’t happen overnight.

Are any Toyotas exempt from LCT?

Yes. Vehicles classified as commercial-use, such as the Toyota Tundra, are currently exempt from LCT. That makes them a smart choice for eligible buyers looking to avoid the additional tax.

Want to know what’s included and what’s not? Our team can help break it down and guide you through your options—whether you’re buying for work, family or adventure.

In summary:

• There is no official change to the LCT at this time.
• Don’t base your buying decision on speculation.
• Commercial vehicles like the Tundra remain exempt.
• We’ll keep you updated if anything changes.

At New Town Toyota, we believe in clarity, not confusion. If you're weighing up your next vehicle and unsure how LCT might affect the price, talk to our team today. We're here to help you drive away with confidence.