TABLE OF CONTENTS
Car definition
Cars (for income tax purposes) are defined as motor vehicles (including four-wheel drives) designed to carry both:
- a load less than one tonne
- fewer than nine passengers.
Last modified: 02 Oct 2020 QC 33720
Car cost limit for depreciation & GST limit
There is a limit on the cost you can use to work out the depreciation of cars and station wagons, including four-wheel drives. The maximum value you can use for calculating your claim is the car limit (irrespective of any amount you were paid for a trade-in) in the year in which you first used or leased the car.
Yearly car limit
| Financial year | Limit (net GST) | GST credit up to max claim (1/11 of limit) | Reference |
| 2024 | 68,108 | ||
| 2023 | 64,741 | ||
| 2022 | 60,733 | ||
| 2020–21 | $59,136 | 5,376 | The indexation factor is 1.027, calculated as 377.9 divided by 368.1. |
| 2019–20 | $57,581 | 5,234.64 | No indexation – the indexation factor is 0.987 calculated as 368.1 divided by 373.0. (Note: annual taxation determinations for the car limit are no longer published.) |
| 2018–19 | $57,581 | 5,234.64 | TD 2018/6 |
| 2017–18 | $57,581 | 5,234.64 | TD 2017/18 |
| 2016–17 | $57,581 | 5,234.64 | TD 2016/8 |
GST limit
Generally, if you purchase a car and the price is more than the car limit, the maximum amount of GST credit you can claim is one-eleventh of that limit. For 2017–18, the maximum GST credit you can claim is $5,234 (that is, 1/11 × $57,581). This limit also applies to cars which are fuel efficient. If you purchase a car with a price that is more than the car limit, you include only the amount of the car limit (or the proportion of the car limit relating to business use) at label - Last modified: 11 Jan 2018 QC 16374
Exceptions
In certain circumstances, you can claim a GST credit for the full amount of GST included in the price of a car even if the car costs more than the car limit. The car must be used in carrying on your business and at least one of the following conditions must be met:
- you hold the car solely as trading stock, other than holding the car for hire or lease
- you carry out research and development for the manufacturer of the car
- you export the car in circumstances where the export is GST-free
- it is an emergency vehicle
- it is a commercial vehicle that is not designed for the principal purpose of carrying passengers
- it is a motor home or campervan
- it is a vehicle specifically fitted out for transporting disabled people seated in wheelchairs (unless the sale of the car was GST-free).