If you're planning to buy a car for your business this financial year, it's worth knowing the new thresholds that kick in from 1 July 2026.

New car limit for 2027

The car limit for the 2027 income year has increased to $69,883. This is the maximum value you can use to calculate depreciation on a car used for work or business purposes, provided the car is first used or leased during the 2027 income year. If your car costs more than this, you can't claim depreciation on the excess — no matter how essential that extra feature list felt at the dealership.

GST credits are capped too

If you're registered for GST and buy a car above the car limit, the maximum GST credit you can generally claim is $6,353 — that's one-eleventh of the $69,883 threshold. Even if the car costs significantly more, your GST credit doesn't grow with it.

Luxury car tax thresholds

The luxury car tax (LCT) thresholds have also moved for 2027 income year:

• Fuel-efficient vehicles: $91,661
• All other vehicles: $80,809

Cars priced above these thresholds attract LCT on the amount over the limit, so it's a factor worth building into your budget if you're eyeing off a higher-end vehicle for the business.

The takeaway

Whether you're upgrading the work ute or adding a car to the fleet, these limits directly affect your tax outcome. If you're planning a vehicle purchase before or after 1 July 2026, talk to us first — timing and structure can make a real difference to what you can claim.

Need Help with your Business, Bookkeeping, Tax or SMSF requirements?

If you would like a little help, please get in touch with us for assistance. We can help with your business, bookkeeping, tax and SMSF requirements. To book an appointment, use our online booking system, give us a call on 07 3289 1700, or email us at reception@rgaaccounting.com.au.We look forward to assisting you this tax season!

Please also note that many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances. Should you have any further questions, please get in touch with us for assistance with your SMSF, business, bookkeeping and tax requirements. All rights reserved. Brought to you by RGA Business and Tax Accountants. Liability Limited by a scheme approved under Professional Standards Legislation.