2026-27 Federal Budget – Electric car discount
More Sustainable FBT Treatment of Electric Cars
From 1 April 2029, all electric cars valued up to the fuel-efficient luxury car tax threshold will get a permanent 25% FBT discount, applied through a 15% rate in the FBT statutory formula.
Transitional arrangements:
- Eligible electric cars will keep the FBT discount rate applied when the arrangement started.
- Electric cars worth up to $75,000 and provided before 1 April 2029 will continue to receive a 100% FBT discount (0% statutory rate).
- Electric cars worth above $75,000 and up to the luxury car threshold, provided between 1 April 2027 and 1 April 2029, will receive a 25% discount (15% statutory rate).
- The existing 20% statutory rate continues for all other cars, including electric cars above the luxury car threshold.
- Reportable fringe benefits for eligible EVs will still be calculated as if a 20% statutory rate or cost basis applied.
- Eligible EVs will remain exempt from import tariffs permanently.
Financial impact: Estimated to increase government receipts by $1.9 billion and payments by $200 million over five years from 2025–26.