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 2014-15$57,466
 2015-16$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 15 July 2015