Car Cost Limit for 2009-10

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Car Cost Limit for 2009-10

Are you?	- A taxpayer who claims a tax deduction for depreciation on your car?
At a glance:	- In a recent Taxation Determination, the Tax Office has advised that the car cost limit and luxury car tax threshold for the 2009-10 year will remain the same as for the 2008-09 year.
You should:	- Ensure that you consider the car cost limit when calculating your claim for depreciation on your car, and claiming GST on its acquisition. - Contact us if you require any clarification or advice.

1.	The Tax Office has released a determination advising that the car cost limit for the 2008-09 year is $57,180, the same as it was in 2007-08.
2.	For depreciation purposes, the first element of the cost used for the purchase of a car is subject to the car cost limit. This means that if the cost of a car exceeds the cost limit, any depreciation claim is calculated as if the cost is equal to the car cost limit.
3.	The car cost limit is relevant for cars used mainly for carrying passengers, and applies whether they are new or second-hand.
4.	The Luxury Car Tax (LCT) threshold will also be $57,180 for the 2009-10 year, while the fuel efficient car limit will be $75,000.
5.	Motor Vehicles that are defined as "luxury cars" are subject to luxury car tax.
6.	For 2009-10, the LCT will be applied to the portion of the cost of the vehicle that exceeds $57,180. (click here for more information).