New Luxury Car Tax to Force Australians to Adopt EVs

‘These changes will encourage greater take-up of fuel-efficient vehicles,’ said the 2023-24 mid-year budget outlook.

Electric vehicles (EV) line up outside a Tesla dealership in Melbourne, Australia, on April 19, 2023. William West/AFP via Getty Images

Australians will soon need to switch to an electric vehicle (EV) or a hybrid car if they want to avoid the luxury car tax in 2025.

In the newly released 2023-24 Mid-Year Economic and Fiscal Outlook (pdf), the federal Labor government introduced a major change to Australia’s luxury car tax (LCT) in an effort to “modernise” it.