Costs of the EV of Australia, PHEV tax breaks 10 times higher than prediction – expert

The Australian Government Tax (FBT) exemption from the Australian government for certain electric vehicles (EVs) and plug-in hybrids (PHEVs) has projected taxpayers 10 times more than initially, according to a tax expert.

Speak with the Australian Financial ReviewInstitute of Public Accountants Senior Tax Advisor Tony Greco estimated that the government loses around $ 564 million annually due to tax revenues as a result of the exemption.

In 2022, Treasury predicted the FBT exemption to cost $ 55 million this financial year, with Mr Greco’s estimation more than 10 times higher than the government figures.

It is worth noting that Mr Greco’s estimate is based on an average EV costs of $ 60,000, spread over 100,000 close lease contracts.

The FBT exemption launched in July 2022, applies to EVs and PHEVs priced under the Luxury Car Tax (LCT) threshold for fuel -efficient vehicles (currently $ 91,387) and purchased by Novated Rent Contracts.

Hundreds of new cars are available via Carexper now. Get the experts by your side and score a lot. Browse now.

With the scheme, the government effectively takes on the costs of the border benefit tax of your employer, which would usually be passed on to you, so that annual savings of a maximum of five digits are brought.

There is no time limit for the schedule for EVs, but since the introduction the deadline of 1 April 2025 has been for PHEVs, whereby eligible vehicles must be delivered at the end of this month.

According to data provided to the publication by the National Automotive Leasing and Salary Packaging Association (NAVSPA), more than 100,000 eligible rental contracts have been concluded for EVs and PHEVs.

An earlier estimate by the Institute of Public Accountants has the cost forecast of $ 55 million of $ 55 million to only 4700 EV owners who took the exemption, connected, Fend Reports.

In the time since the introduction, EVs went from 1.8 percent of the new car sales to 7.4 percent at the end of last year. Likewise, the PHEV sales has risen from less than 1.0 percent of the new car market to almost 2.0 percent.

Although this has been a positive result for reducing the CO2 emissions from the government, it is amounts for taxpayers.

Although the exemption for PHEVs will be completed within a month – with buyers who do not hand in before the deadline of April 1 to pay the FBT if they take a mentioned lease agreement – EV -buyers can use it in the near future.

The Council of Electric Vehicle, the advocacy of Australia for EVS, has continued that the PHEV exemption will be expanded, despite the previously included by Mr Bowen, the policy to get the policy across the line.

“This discount in electric cars is a hit at Australians and we call in all sides of politics to extend this policy during the upcoming federal elections,” said Julie Delvecchio, CEO of Electric Vehicle Council, in a media statement.

“The discount illuminates the costs of living by helping families save on transport costs and accelerating the shift to cleaner, more affordable cars.

“EVs not only benefit the individual driver, they also reduce the carbon emissions of the nation, reduce air pollution that makes people sick and Australia escapes our historical dependence on foreign oil.

“The discount of the electric car easily enables people to place their hard -earned money for the lease of an electric vehicle. The enormous benefits of this policy are chalk and cheese compared to the billions paid by the government for fuel subsidies every year.

“The facts show that more than 52 percent of electric cars are purchased in our suburbs and regions. We do indeed know that the greatest admission of everyday families in the suburbs are struggling with the costs of living.

“We can already see that the FBT exemption helps to deliver more EVs to the second-hand car market, so that more Australians can enjoy the benefits of driving an electric car. Households with a low income will benefit enormously by switching to a second -hand EV, because they can avoid volatile gasoline prices that we know they hurt families. “

It is worth noting that the Electric Vehicle Council is in line with overseas definitions of EVs and has PHEVs in its figures.

Last month the Nalspa repeated its earlier calls for the expansion of the PHEV exemption.

“The FBT exemption makes Bevs and PHEV’s more affordable for daily working Australians,” said Nalspa Chief Executive Rohan Martin.

“The exemption usually saves employees around $ 5000 a year on an EV via a Novated Rent. The exemption means that a $ 50,000 EV could cost the same or even less to lease in four years than a petrol car of $ 30,000.

“The cost of living is hard to hit, so finding ways to save on large purchases such as a new vehicle is really important. Although we encourage motorists to fully benefit from the FBT exemption for PHEVs as long as it lasts, there are other ways to save when buying a new car.

“After 1 April, employees who want a PHEV can still benefit from a nominal lease where they can acquire a new car with the help of their salary before taxes.

“A novated lease reduces your income tax and removes GST about the purchase price of the car and on operating costs, such as fuel and maintenance. This can lead to considerable savings, which may be thousands of dollars annually in comparison with the purchase of a car or to finance them with a loan.

“Moreover, the FBT exemption for fully electric vehicles remains in place until at least 2027, which results in even greater savings for those who completely switch to electric driving.”