Luxury Car (Only for Business) Concept

Applicable only for business use.

What is Luxury Car?

In FY 2021 -22 Car Gross Value was more than $60733

In FY 2022 -23 Car Gross Value was more than $64741

Which vehicles are exempt from the Luxury Car Limit?

i. Any vehicle designed to carry a load greater than 1 tonne.

ii. Any vehicle designed to carry 9 or more passengers.

iii. Motorcycles or similar vehicles.

iv. Any vehicles fitted out to use for people living with a disability.

If a car value exceeds above threshold Limit, then they cannot claim deprecation on the full value of the Asset.

Then what is the maximum depreciation allowed on the Luxury car?

Maximum Depreciation allowed on Luxury Car

Example 1: FY 2021-22, Emil Pty Purchase Luxury Car Value $60000?

$60000 Lesser than Luxury Car Limit $60733 

So Normal Depreciation

Journal Entry

Car /ac Dr 53636

GST a/c Dr 5363

Stamp Duty a/c Dr 1000

To Bank 60000

(Being a New Car purchase)

Car a/c Dr 1000

To Stamp Duty 1000

(Stamp duty value added to cost of the car)

Depreciation a/c Dr 5464

To Car 5464

(Depreciation at 10%)

Example 2:  FY 2021-22 Emil Pty Purchase Luxury Car Value $71000

$71000 Exceed Luxury Car Limit 

Journal Entry

Car /ac Dr 63636

GST a/c Dr 6363

Stamp Duty a/c Dr 1000

To Bank 71000

(Being a New Car purchase)

Car a/c Dr 1000

To Stamp Duty 1000

(Stamp duty value added to cost of the car)

Depreciable Car a/c Dr 55211.82

No Depreciable Car a/c Dr 10267

GST a/c Dr 5521.18

To Stamp Duty 71000

(Maximum value allowed as per Luxury Car Limit)

Depreciation a/c Dr 5521

To Car 5521

(Depreciation at 10%)