The Tesla luxury car tax in Australia is 33% charged on the portion of a Tesla’s value above $91,387 for the 2025–26 financial year, after a GST adjustment. Because every Tesla sold in Australia is fully electric, all models qualify for the higher fuel-efficient vehicle threshold rather than the $80,567 threshold that applies to conventional cars.1Australian Taxation Office. Luxury Car Tax Rate and Thresholds Whether you actually pay anything depends on which model you buy and how many extras you add.
Which Teslas Actually Trigger the Tax
Most Model 3 and Model Y buyers pay no LCT at all. The Model 3 range starts around $55,000 for the rear-wheel-drive variant and tops out near $81,000 for the Performance version. The Model Y sits roughly between $59,000 and $69,000 depending on the drivetrain. At those list prices you’re comfortably under the $91,387 threshold, and LCT only kicks in if you load up enough options, accessories, and dealer-fitted extras to push the total over the line.
The Model S and Model X are a different story. Both are priced well above $91,387 and will almost certainly generate a five-figure LCT bill on top of the sticker. If you’re shopping at that end of the lineup, the calculation below is the one that matters.
The Threshold That Applies to Teslas
Australia’s LCT system splits vehicles into two categories. Fuel-efficient vehicles get a threshold of $91,387 for 2025–26; other vehicles get $80,567. The gap of roughly $10,820 is the built-in advantage for choosing a cleaner car.1Australian Taxation Office. Luxury Car Tax Rate and Thresholds
From 1 July 2025 the fuel-efficient standard tightened from 7 litres per 100 kilometres to 3.5 litres per 100 kilometres. Fully electric Teslas meet the requirement either way because they consume no liquid fuel. The change mainly cuts out plug-in hybrids and efficient petrol cars that used to qualify.
The ATO indexes both thresholds each year. The 2026–27 figures had not been published at the time of writing, so if you’re buying after 1 July 2026, check the ATO’s rate page before finalising your numbers.
What Gets Counted in the Price
The LCT value is not just the sticker price. It includes the vehicle’s retail price with GST, dealer delivery charges, and any accessories, modifications, or optional extras fitted before delivery or arranged through the dealer.2Australian Taxation Office. Working Out the LCT on a Sale Premium paint, upgraded wheels, and enhanced interior packages all add to the taxable figure.
Registration, compulsory third-party insurance, and stamp duty are excluded because they are separate government charges rather than part of the vehicle’s price.2Australian Taxation Office. Working Out the LCT on a Sale The distinction matters for borderline cases. A Model 3 Performance at around $81,000 looks safe, but $12,000 of options and delivery costs could push its LCT value past $91,387 and trigger the tax on the excess.
How to Calculate What You’ll Pay
The formula has three steps. Subtract the $91,387 threshold from the LCT value, multiply the excess by 10/11 to strip out the GST component so you aren’t taxed on a tax, then apply the 33% rate.2Australian Taxation Office. Working Out the LCT on a Sale
For a Tesla Model S with an LCT value of $140,000:
- Excess over threshold: $140,000 − $91,387 = $48,613
- GST adjustment: $48,613 × 10 ÷ 11 = $44,193.64
- Tax at 33%: $44,193.64 × 0.33 = $14,583.90
That $14,583.90 gets added to the purchase price. The dealer handles the paperwork and remits the tax to the ATO through its Business Activity Statement, but the cost flows through to you.3Australian Taxation Office. How LCT Works
Buying a Tesla Through a Business
Registering the purchase to a business does not exempt you from LCT, and it introduces two further limits that catch buyers off guard.
First, you cannot claim any GST credit on the luxury car tax component itself, regardless of how much you use the vehicle for business purposes.4Australian Taxation Office. Purchasing a Motor Vehicle
Second, the car cost limit caps both your GST credit and your depreciation. For 2025–26 the limit is $69,674, which means the maximum GST credit is one-eleventh of that, or $6,334. A $140,000 Tesla contains roughly $12,727 of GST, but you can only claim $6,334 back.4Australian Taxation Office. Purchasing a Motor Vehicle The same $69,674 also caps the amount you can depreciate for income tax purposes.5Australian Taxation Office. Assets and Exclusions
These caps apply equally to fuel-efficient and conventional cars, so the electric advantage stops at the higher LCT threshold.
Exemptions and Refunds
A few narrow situations remove or reduce the tax.
Vehicles registered or intended for use as emergency vehicles, such as ambulances, police cars, or firefighting vehicles, are exempt. The supplier needs a written certificate from the purchaser confirming sole use for that purpose.6Australian Taxation Office. When Luxury Car Tax Doesn’t Apply
Vehicles specially fitted to transport people seated in wheelchairs are not treated as luxury cars, so LCT doesn’t apply. For other disability-related modifications, the cost of adapting the car for a person with a disability to drive or be transported in it is excluded from the LCT value, though the base vehicle remains taxable. On a $100,000 Tesla with $15,000 of disability modifications, only $85,000 counts toward the LCT calculation.7Australian Taxation Office. Tax Concessions on Cars for People With Disability
Primary producers and tourism operators can claim a partial LCT refund capped at $10,000 per vehicle. You must be registered for GST and use the vehicle in carrying on the business. Primary producers such as farmers and graziers can claim on one eligible vehicle per financial year up to the $10,000 cap. Tourism operators can claim on multiple eligible vehicles, each capped at $10,000, provided the business’s principal purpose is carrying tourists for tourism activities.8Australian Taxation Office. Luxury Car Tax Credits and Refunds
Claims are lodged on the ATO’s dedicated refund form, with purchase records, tax invoices, and evidence of business use.9Australian Taxation Office. Application for Luxury Car Tax Refund for Primary Producers and Tourism Operators On a Model S with a $14,500 LCT bill, a $10,000 refund still leaves a real cost, but it takes the worst of it off the table.
One last warning for anyone tempted to be creative: the ATO treats artificial arrangements to keep a sale under the threshold, such as splitting a purchase into components, as anti-avoidance targets, and administrative penalties follow.10Australian Taxation Office. ATO Action to Reduce the Luxury Car Tax Gap