Ask your Aspen advisor:
“If we are thinking about an EV through the business or salary packaging, should we move before the FBT concession starts changing?”
The Government has announced that the current FBT exemption for electric vehicles will be wound back in three stages. The important part, though, is this: nothing changes immediately. The full exemption remains in place for qualifying EVs until 31 March 2027.
That gives businesses and employees a useful planning window.
How the change will roll out
The source sets out three phases:
Phase 1 – now to 31 March 2027
The current rules continue. Qualifying EVs under the fuel-efficient LCT threshold can still receive a full FBT exemption.
Phase 2 – 1 April 2027 to 31 March 2029
The rules start to narrow:
- EVs $75,000 or less keep the full exemption
- EVs above $75,000 but still under the LCT threshold move to a 25% FBT discount instead
Phase 3 – from 1 April 2029
All eligible EVs under the LCT threshold move to a 25% FBT discount, regardless of price.
The Government has also indicated that existing leases will be grandfathered, which should give some comfort to those already using current arrangements.
Why this matters
The current FBT exemption has been a major driver of EV uptake, especially through novated leases and salary packaging. The staged wind-back still supports EVs, but it makes timing much more important.
If you are already planning to move to an EV, getting the structure in place before the concession starts tightening may make a real difference.
What to think about now
If an EV is on your radar, it is worth checking:
- whether the vehicle price sits under the key thresholds
- whether salary packaging or a novated lease still gives the best outcome
- whether waiting could cost you access to the full exemption
- and whether an existing arrangement might be protected if entered into sooner rather than later
Final thought
This is not the end of EV tax support, but it is the end of assuming the current rules will stay as generous as they are now.
If an EV is already part of the conversation for you or your employees, the next 12 months may be the most valuable planning window.
