The Future of the Luxury Car Tax: What It Means for Premium 4x4s

At MRT, we’re always keeping a close eye on industry changes that could impact our customers, especially those passionate about high-end 4x4s. With the potential axing of the Luxury Car Tax (LCT) by the re-elected Labor government, there’s a lot of buzz about what this means for vehicle pricing—and your next off-road adventure.

Key Takeaways:

• LCT scrapping could mean significant price reductions on premium 4WDs. 
• Savings may be offset by new emissions rules and state-based taxes. 
• Final decisions are expected by the end of 2025. 

What Is the Luxury Car Tax?

The LCT, introduced in 2000, slaps a 33% tax on the portion of any vehicle priced over $80,567, or $91,387 for more fuel-efficient models. Designed to protect the now-defunct Australian car industry, it’s been a sticking point for high-end buyers—adding thousands of dollars to the price tag of many 4x4s.

Why Might the LCT Be Scrapped?

The Albanese-led government is considering axing the tax to improve trade relations with the European Union, which has long seen the LCT as a barrier to fair competition for European carmakers. While legislation isn’t final yet, experts predict the LCT could disappear by the end of 2025.

How Could It Affect Your 4WD Purchase?

If the LCT goes, we’re likely to see immediate savings on popular models. For example, the Toyota LandCruiser 300 Series Sahara ZX could drop by about $15,600 in tax, bringing the price down to around $128,400 before dealer and on-road costs.

Other models like the Nissan Patrol could save you $7,000, the RAM 1500 Laramie might shed $13,000, and the Ford F-150 Lariat or Land Rover Defender 110 D300 could see price cuts ranging from $10,000 to $15,000.

But Wait—There’s a Catch

Don’t pop the champagne just yet. The New Vehicle Efficiency Standard (NVES) is set to take effect on July 1, 2025. This new rule aims to cut vehicle emissions, and manufacturers whose cars exceed CO₂ limits will face fines—costs they’re likely to pass straight onto you.

Plus, in states like Victoria and Queensland, luxury car taxes of up to 5% still apply on vehicles priced over $100,000, meaning those savings could shrink fast.

So, Is It Time to Buy That Dream 4×4?

While the LCT’s removal could make premium off-roaders more affordable, emissions penalties and state taxes might offset those benefits. At MRT, we recommend staying informed and keeping an eye on the legislation’s progress.