PHEVs FBT EXEMPTION ENDING SOON

Key Points to Know:

• New PHEV leases settled before 31 March 2025 can still benefit from the FBT exemption.

• The FBT exemption for fully-electric vehicles will remain unchanged beyond 1 April 2025.

• Any changes to existing PHEV leases after 1 April 2025, such as refinancing or changing employers, may result in the lease becoming subject to FBT.

How Does This Impact New PHEV Leases?

If your PHEV novated lease is settled and the vehicle is delivered on or before 31 March 2025, you can still benefit from the FBT exemption for the entire lease term. However, leases settled after this date will not qualify for the exemption, which may increase the overall cost of your lease.

What Does "Settled" and "Delivered" Mean?

For a lease to be considered settled, all documentation and financial approvals must be completed, and the lease must be fully executed by 31 March 2025. Simply having a contract of sale or approval in place is not sufficient. The vehicle must also be delivered and in your possession by 31 March 2025.

Medicare levy

Increasing the Medicare levy low‑income thresholds

The Government has increased the Medicare levy low‑income thresholds for 2023–24, ensuring more than one million low‑income taxpayers continue to be exempt from the Medicare levy or pay a reduced levy rate.

Support for renters

Boosting Commonwealth Rent Assistance

The Government is providing $1.9 billion over five years to increase maximum rates of Commonwealth Rent Assistance by a further 10 per cent.

This builds on the 15 per cent increase in September 2023 and will take maximum rates over 40 per cent higher than in May 2022 – a combined result of indexation and the actions of this Government.

What Happens If I Settle a New Lease Before the Deadline?

If your new lease is settled before 31 March 2025, you’ll continue to benefit from the FBT exemption for PHEVs until the lease term ends. Ensure you allow enough time for approvals and processing to meet this deadline.

What If I Change Jobs and My New Employer Uses the Same Leasing Provider?

If you change jobs and your new employer uses the same leasing provider, a new Novation Agreement will need to be signed by your new employer, making this an alteration of the terms of your lease. As such, your PHEV may become subject to FBT.