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 included in the ‘log book’ claim method.

Prior to 1 July 2015 the ‘one-third of actual expenses’ was also available as a claim method.

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. The following depreciation limits apply:

Car depreciation cost limits – earlier years

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

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 example in 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 2018-05-25