Federal Authorities to impose capital good points tax on used automobile gross sales – UPDATE

UPDATE, 12:00pm, 01/04/22: Effectively carried out to our readers on seeing by this April Idiot’s Day joke. The unique story may be discovered beneath.

As a follow-up to this week’s 2022 Federal Finances, the Authorities has right this moment introduced the appliance of a capital good points tax on second-hand automobile gross sales.

The ‘LandCruiser Levy’ will apply to all automobiles bought at a value above their agreed worth, based mostly on situations of the market previous to 1 April 2020. This removes any inflated pricing the second-hand automobile market has endured over the previous 24-months.

Automotive property bought for a revenue will likely be topic to the identical enterprise fee calculation of tax on the achieve as cryptocurrency and share property. For instance, this is able to see a 19 per cent capital achieve tax imposed on a automobile bought for between $18,200 and $45,000 above its agreed pre-period worth.

Motor automobiles have been beforehand exempt from capital good points tax however Tony Gouger from the Fringe Offset Alternative Liasion division of the Federal Treasury famous “the accountability of the Authorities is to establish each alternative the place Australians are capable of flip a revenue and clip the ticket on the best way by.”

An instance state of affairs famous a 2007 Toyota LandCruiser 79 Collection ute (new value of $56,490) which has a pre-1 April 2020 value estimation of $27,400 being bought within the present marketplace for $186,450.

This represents a $159,050 capital achieve, which is taxed at a fee of 37 per cent. The vendor would want to then pay $58,848.50 in tax, however nonetheless pocket the remaining $100,000 revenue for themselves.

The brand new tax is anticipated to yield some $4.2 billion further taxation income and will likely be applied efficient from 1 April.

A press convention is anticipated to be held at noon right this moment, with additional particulars.