Luxury Car Tax: Defining a Vehicle’s Primary Use

Luxury Car Tax: Defining a Vehicle’s Primary Use

The Australian Taxation Office (ATO) has recently shed light on the determination of a car’s primary purpose for Luxury Car Tax (LCT) purposes. This clarification is especially pertinent, as LCT does not apply to cars primarily designed for transporting goods rather than passengers.

At its core, a luxury car, subject to LCT, is defined by its LCT value surpassing the LCT threshold. However, it’s important to note that commercial vehicles, specifically those not designed primarily for passenger transport, are expressly excluded from the luxury car category.

The ATO’s latest determination outlines a range of factors to be taken into account when determining a car’s primary purpose and it provides guidance on assessing a car’s modifications.

The determination states that commercial vehicles are unlikely to have the body types of:

  • station wagons 
  • off-road passenger wagons 
  • passenger sedans 
  • people movers
  • sports utility vehicles. 

Consequently, the supply of these vehicles above the LCT threshold without paying LCT might trigger the ATO’s attention.

Understanding these distinctions is crucial in navigating the complexities of luxury car tax. 

Should you have any questions or require further guidance on this matter or any other financial concerns, please don’t hesitate to reach out to our expert team. We’re here to ensure your financial affairs align with the latest regulations and best practices.

Contact us at 1800 618 800 or via email at

Subscribe to our newsletter

Enter your details below to receive regular updates, industry news and announcements

  • This field is for validation purposes and should be left unchanged.