Luxury Car Depreciation Cost Limit

Cars with a higher value have a ceiling value assigned to them for the purposes of depreciation claims.

Depreciation (“decline in value”) claims for Work Related Car Expenses may only be used for the ‘one-third of actual expenses’, or ‘log book’ methods.

When applicable, the depreciation limit applies to cars, station wagons and four wheel drives.

There are exemptions associated with use of vehicles by or for, certain disabled persons, and hearses.

The value limits are indexed annually to the ‘motor vehicle purchase sub-group’ of the CPI.

      Depreciation car value limits for the financial year:
 1985-86 $26,660  1994-95 $51,271  2003-04 $57,009
 1986-87 $29,646  1995-96 $52,912  2004-05 $57,009
 1987-88 $34,775  1996-97 $55,134  2005-06 $57,009
 1988-89 $39,331  1997-98 $55,134  2006-07 $57,009
 1989-90 $42,910  1998-99 $55,134  2007-08 $57,123
 1990-91 $45,056  1999-2000 $55,134  2008-09 $57,180
 1991-92 $45,462  2000-2001 $55,134  2009-10 $57,180
 1992-93 $47,280  2001-2002 $55,134  2010-11 $57,466
 1993-94 $48,415  2002-2003 $57,009  2011-12 $57,466
 2012-13 $57,466
 2013-14 $57,466
TD 2014/17  2014-15 $57,466

 

The limit that applies to each car is the limit applicable for the year in which the car is first used for business purposes.

GST and the car depreciation limit

A car purchased for more than the car depreciation limit has a maximum GST credit of one-eleventh of the limit.

Thus for 2013-14, the maximum GST credit would be $5,224 (that is, 1/11 x $57,466). This same limit also applies to cars which are fuel efficient.

Note that the Luxury Car Tax Thresholds are separately determined.

See also

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This page was last modified on 25 June 2014