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Beat the EV rush: secure your electric car before the tax benefits change
The full FBT exemption on eligible electric cars starts narrowing from 1 April 2027. If an EV is on your list through a novated lease, the order you place now decides what you keep.
The key dates for new eligible arrangements
Announced in the 2026-27 Federal Budget on 5 May 2026. Draft legislation has been released. Not yet law.
NOW TO 31 MARCH 2027
Full FBT exemption
No change. Eligible EVs below the fuel-efficient luxury car tax threshold stay fully exempt.
1 APRIL 2027 TO 31 MARCH 2029
$75,000 cap introduced
EVs valued at $75,000 or less keep the full exemption. EVs above $75,000 and below the fuel-efficient LCT threshold (currently $91,661) get a 25% discount on FBT instead.
FROM 1 APRIL 2029
25% discount only
All eligible EVs below the LCT threshold move to a 25% discount on FBT. The full exemption ends.
Which date is yours?
The exemption is a novated lease benefit. If you buy privately, FBT does not apply and nothing changes for you.
EV over $75,000
1 April 2027
This is the band the change hits hardest. To keep the full exemption, your lease needs to be in place and the car delivered before this date.
EV at $75,000 or less
31 March 2029
Under the proposal you keep the full exemption until this date. The catch: the rules are not yet law, demand is expected to surge, and popular models already carry long delivery times. Locking in now is the only way to be certain.
An order alone may not secure the current exemption. Under the draft legislation, existing eligible arrangements are protected. In practice that means the lease signed and the car delivered, not a deposit on a car that lands after the cut-off. Factor delivery time in from day one.
What to do now
1. Tell us the car
A model, a shortlist, or just a budget band. We work with it.
2. We check stock and timing
Available stock, realistic delivery dates and lease numbers across 50+ lenders.
3. Lease in place, car delivered
Before the date that applies to you, with the paperwork done properly.
Check my EV options
Tell us what you’re looking at. A consultant will call you back, usually within the hour on a business day. Or call 1300 547 226.
Common questions
Is this law yet?
No. The Government announced the phased changes in the 2026-27 Federal Budget on 5 May 2026 and released draft legislation in September 2026. The dates and thresholds could still change before the bill passes.
I already have an EV on a novated lease. Am I affected?
The ATO has said existing leases will not be affected, and the draft legislation includes transitional rules to protect eligible arrangements entered into between 1 July 2022 and 31 March 2027 for as long as that arrangement continues.
Does the $75,000 cap include on-road costs?
How the car’s value is measured against the cap is being set in the legislation. We will update this page when it is confirmed. Call us for the current position on a specific car.
Do plug-in hybrids qualify?
No. Plug-in hybrids are no longer covered by the exemption. The current exemption applies to battery electric and hydrogen fuel cell vehicles below the fuel-efficient luxury car tax threshold.
What is the luxury car tax threshold?
For the 2026-27 financial year the fuel-efficient vehicle threshold is $91,661. It is indexed each July.
General information only. This page summarises the Australian Government’s announcement of 5 May 2026 and Treasury’s exposure draft legislation as at October 2026. The measure is not yet law and may change. It is not tax, legal or financial advice and does not take your circumstances into account. Speak to your accountant or tax adviser before entering a novated lease. Sources: ATO, Electric car discount (updated 14 May 2026); ATO, Luxury car tax rate and thresholds; Treasury Laws Amendment Bill 2026: Phased Changes to the FBT Electric Car Exemption (exposure draft).