Overview
- The federal government announced a phased reduction of the electric‑car Fringe Benefits Tax exemption that is forecast to deliver $1.7 billion in budget savings.
- The full FBT exemption remains until March 31, 2027, then from April 1, 2027 it applies only to EVs priced at $75,000 or less.
- From April 1, 2029, all eligible EVs below the luxury car tax threshold receive a permanent 25% FBT discount, with existing novated leases grandfathered and tariff exemptions unchanged.
- Treasury figures show the concession’s cost jumped from about $90 million initially to an estimated $1.35 billion this year, and reviews said benefits skewed to higher earners and more expensive cars.
- The government’s review estimates the change will lift costs for buyers using salary‑packaged leases, with a typical four‑year lease on a $50,000 EV adding about $12,800 to $18,800 in FBT from 2029.