List of EVs and PHEVs eligible for $0 FBT through a novated lease
Abarth
Alfa Romeo
AUDI
BMW
BYD
- BYD Atto 3 Standard
- BYD Atto 3 Extended
- BYD Dolphin Dynamic
- BYD Dolphin Premium
- BYD Seal Dynamic
- BYD Seal Premium
- BYD Seal Performance
- BYD Sealion 6
Cupra
Ford
Fiat
GWM
Hyundai
- Hyundai Kona Elite Standard Range
- Hyundai Kona Elite Long Range
- Hyundai Kona Highlander Standard Range
- Hyundai Kona Highlander Long Range
- Hyundai Ioniq 5 Dynamiq
- Hyundai Ioniq 5 Techniq
- Hyundai Ioniq 5 Epiq
- Hyundai Ioniq 6 Dynamiq
- Hyundai Ioniq 6 Techniq
- Hyundai Ioniq 6 Epiq
Kia
- Kia Niro S
- Kia Niro GT-Line
- Kia Niro Plus S
- Kia EV6 Air
- Kia EV6 GT-Line RWD
- Kia EV6 GT-Line AWD
- Kia Sorento GT-Line PHEV
- Kia EV5 Air
- Kia EV5 Earth
- Kia EV5 GT Line
Lexus
- Lexus UX 300e Luxury
- Lexus UX 300e Sports Luxury
- Lexus RZ450e Luxury
- Lexus RZ450e Sports Luxury
- Lexus RZ450e Sports Luxury Two-Tone
Mazda
Mercedes
MG
- MG HS+ Excite
- MG HS+ Essence
- MG ZS EV Excite
- MG ZS EV Essence
- MG4 Excite 51
- MG4 Excite 64
- MG4 Essence 64
- MG4 Long Range
Mini
Mitsubishi
- Mitsubishi Eclipse Cross PHEV ES
- Mitsubishi Eclipse Cross PHEV Aspire
- Mitsubishi Eclipse Cross PHEV Exceed
- Mitsubishi Outlander PHEV ES
- Mitsubishi Outlander PHEV Aspire
- Mitsubishi Outlander PHEV Exceed
- Mitsubishi Outlander PHEV Exceed Tourer
Nissan
Peugeot
- Peugeot e208
- Peugeot e2008
- Peugeot 308 GT- Sport PHEV
- Peugeot 3008 GT PHEV
- Peugeot 408 PHEV
- Peugeot 408 GT PHEV
- Peugeot 508 GT PHEV
Polestar
- Polestar 2 Standard Range
- Polestar 2 Long Range Single Motor
- Polestar 2 Long Range Performance
- Polestar 4
Renault
SKODA
- SKODA Enyaq Sportline
- SKODA Enyaq RS
SMART
Tesla
- Tesla Model 3 RWD
- Tesla Model 3 Long Range
- Tesla Model 3 Performance
- Tesla Model Y RWD
- Tesla Model Y Long Range
Toyota
Volvo
- Volvo C40 Recharge
- Volvo XC40 Recharge
- Volvo XC40 Recharge Twin
- Volvo EX30 Extended Plus
- Volvo EX30 Extended Ultra
- Volvo EX30 Performance Ultra
Xpeng
- Xpeng G6 Standard
- Xpeng G6 Long Range
The list above is based on vehicles with an estimated cost below the luxury car tax threshold, as at December 2023. On-road costs, such as dealer delivery, standard and statutory warranties, accessories, modifications and treatments to the car before it's delivered may impact the cost for the purpose of working out luxury car tax, according to the ATO.
Get the best deal on a novated lease
Find my best dealWhat are the eligibility criteria for the novated lease FBT exemption?
To be eligible for the fringe benefits tax (FBT) exemption on an electric car novated lease, the vehicle you are leasing must be:
- A battery electric vehicle, plug-in hybrid electric vehicle, or hydrogen fuel cell electric vehicle.
- A passenger vehicle designed to carry a load of less than one tonne and fewer than nine passengers.
- First held and used after 1 July 2022 (i.e. it was available for use for the first time after this date).
- Valued below the luxury car tax (LCT) threshold which is $91,387 for the financial year 2024/25.
If you’re considering a novated lease on a used car, to be eligible for the FBT exemption you may want to consider these specific aspects of the above criteria:
- The used vehicle must have been first held and used (i.e. by the original owner) after 1 July 2022. If it was in use at all before that date, it will not be eligible for the FBT exemption, even when purchased subsequently.
- The vehicle must never have been subject to LCT. So even if its current sale value is below the LCT threshold, if it was previously subject to LCT (i.e. on a previous sale or when it was imported), it will not be eligible for the FBT exemption.
)
How will I know if my electric vehicle is below the LCT threshold and is therefore FBT exempt?
Your Novated Lease Australia consultant can help you understand which new electric vehicles and PHEVs in Australia are valued below the LCT threshold and are therefore exempt from FBT. The dealer selling the car should also be able to advise you on this.
However, as a general guide, the ATO explains that to be below the LCT threshold, the vehicle’s retail price must be below $91,387 (for the 2024/25 financial year). That is the price of the car, including:
- GST and any customs duty (GST is not payable on the vehicle with a novated lease, but it is factored into the LCT value of the car).
- Dealer delivery charges.
- Standard and statutory warranties.
- Any accessories, modifications, and treatments applied to the car before delivery.
The LCT value of the vehicle does not include:
- Australian taxes, fees, or charges such as stamp duty, transfer fees, and registration.
- Compulsory third-party insurance.
- Extended warranties.
- Costs associated with financing the purchase of the car.
- Service plans.
- Modifications made to the car solely to adapt it for driving by, or transporting, a person with a disability.
What types of vehicles do not qualify for the EV FBT exemption?
The following vehicle types will not be eligible for an FBT exemption, even if they are electric. These kinds of vehicles are not eligible to be paid for through a novated lease more broadly, even if you factor out the FBT exemption.
- Motorcycles or scooters
- Large work vans (i.e. not a passenger vehicle)
- Vehicles that can carry a loan of more than one tonne.
- Caravans and other motor homes.
In addition, mild hybrids (i.e. cars with an electric motor but that do not require charging such as a Toyota RAV4 or Mazda CX-90) are not counted as low-emission vehicles for the FBT exemption. You can, however, still salary sacrifice this kind of vehicle – if just won’t be exempt from FBT.
Commonly asked questions about the FBT exemption on EVs
What is the FBT exemption threshold for 2024?
The FBT exemption threshold for the 2024/25 financial year is $91,387. This is the luxury car tax threshold for fuel-efficient vehicles set by the ATO. Cars valued below the threshold at the time of purchase will be exempt from FBT for the duration of the novated lease, even if the ATO's threshold changes in subsequent years.
Which vehicles are FBT exempt?
Zero- and low-emission vehicles that were first held and used on or after 1 July 2022 are exempt from FBT. That includes battery electric vehicles and plug-in hybrid electric vehicles. To be eligible, the vehicle must be valued below the luxury car threshold of $91,387 for the 2024/25 financial year.
Plug-in hybrids will only be exempt if the lease agreement commences before 1 April 2025.
How much is the FBT on electric vehicles?
If FBT is payable on an electric vehicle, it is charged at 47% (the highest income tax bracket rate of 45%, plus Medicare levy of 2%) of the taxable value of the benefit, according to the ATO. However, if the vehicle is eligible for the FBT exemption, there is no FBT payable.
How can I confirm if my electric vehicle is below the LCT threshold and eligible for the FBT exemption?
If the retail price of the vehicle is below $91,387 (in FY 2024/25), the vehicle may be eligible for an FBT exemption. However, there are specific rules for what should and shouldn’t be included in the price of the vehicle when calculating whether the vehicle is FBT exempt or not.
To remove the guesswork, your Novated Lease Australia consultant will guide you through the selection of new EVs and PHEVs valued below the LCT threshold, ensuring they qualify for an FBT exemption.
Which vehicles are not eligible for the FBT exemption under a novated lease?
Vehicles that do not qualify for the FBT exemption include:
- Motorcycles or scooters.
- Large work vans or vehicles capable of carrying more than one tonne.
- Caravans or motorhomes.
- Mild hybrids, like the Toyota RAV4 or Mazda CX-90, do not qualify as low-emission vehicles for the FBT exemption.
What are the financial implications of the FBT exemption for EVs and PHEVs?
The FBT exemption delivers substantial extra income tax savings by further lowering an employee's taxable income. This is because all lease costs to be salary sacrificed with pre-tax salary.
This makes novated leases an even more attractive option for acquiring an environmentally friendly vehicle.
Are EV car expenses and charging costs exempt from FBT under a novated lease?
Yes, packaged car expenses and charging costs under a novated lease are also exempt from FBT if the vehicle being leased is eligible. This can significantly reduce running costs and boost the tax savings, making EVs and PHEVs even more economical to drive.
When will the FBT exemption in Australia finish?
The exemption is available until 31 March 2025 for plug-in hybrid vehicles. For battery electric vehicles and hydrogen fuel cell electric vehicles the FBT exemption is currently open-ended.
However, when announcing the policy the government said it will review the exemption by mid-2027 based on its impact on EV adoption in Australia. At that stage it's likely the government will make a further announcement regarding the longer-term timeline for the FBT exemption.
Novated lease guides
Need more information? Read our easy-to-understand novated lease guides.
)
