EVs have the potential to transform Australia’s transport and energy sector. However, many barriers prevent Australians from making the switch to EVs.
Novated_EV novated lease electric car subscriptions offer a cost-effective solution to help you embrace sustainable mobility. You can salary sacrifice your lease payments and running costs, reducing your income tax and GST liability.
FBT Exemption
One of the best things about getting an EV through a novated lease is saving money on running costs such as fuel, registration and insurance. In addition, you may be eligible for various state/territory and federal government incentives that can help make your EV more affordable. By salary packaging your EV through a novated lease, you can also enjoy a range of tax benefits, including reduced income tax and accelerated depreciation.
In qualifying for the EV FBT exemption, your vehicle must be an eligible electric motor car that is battery-powered or combines an electric motor with a petrol engine (as opposed to an electric hybrid, such as the Mitsubishi Outlander). The eligible EV must also meet various other criteria, which you can read about here. In addition, you will need to speak to your employer and salary packaging provider to learn more about setting up a Novated_EV novated lease electric car for an electric car. They can provide more information about the available electric cars that qualify for this FBT exemption and can help you get started. They can also explain how the EV FBT exemption will impact your tax situation and suggest other ways to minimise your EV running costs.
Tax Savings
Novated leasing is a popular EV financing method because it offers a range of tax benefits. These include reducing your taxable income and the ability to salary sacrifice all of your vehicle’s running costs. The money you save will vary depending on your vehicle and annual mileage. In addition to the car’s purchase price, you can also salary sacrifice the cost of insurance, maintenance and registration fees. It can add up to significant savings, making an EV more affordable.
With the FBT Exemption available, choosing an electric vehicle through a novated lease is even more cost-effective. The Labor Government’s recently introduced Treasury Laws Amendment (Electric Car Discount) Bill 2022 removes FBT on the low- and zero-emission vehicles that employees sacrifice salaries through their employers as part of a novated lease.
The FBT EV exemption will reduce the price of most electric cars on the Australian market. However, it’s important to remember that this only applies to electric vehicles first held and used before 1 July 2022. In qualifying, the car must be less than $84k when first purchased and cannot be resold for more than two years.
Choosing an EV with an FBT-exempt novated lease will help you save thousands of dollars. It’s a great way to get an all-electric car while saving money on fuel and maintenance costs. You’ll also avoid GST on your car’s finances and running costs.
While EVs have long been the more expensive option than petrol and diesel models, the new tax breaks are helping make them more competitive. For example, a brand-new Ioniq 5 SE rear-wheel drive EV can be leased for $499 per month with three years of warranty and servicing included. The same car would cost about $865 a month if purchased with a five-year loan.
With the increased affordability of an EV, it’s no surprise that businesses are prioritising their employees’ well-being and reducing their carbon footprint. One of Australia’s largest health organisations, Western Health, is implementing a Novated_EV novated lease electric car employee benefit to encourage the uptake of clean vehicles. The organisation’s executive director for people, culture and communications, Sandy Schutte, says EVs are essential to their hybrid work environment.
Flexibility
The FBT exemption for EVs introduced in 2022 makes driving an EV as part of a novated lease more attractive, helping to lower your income tax payments. It will make it possible to upgrade to a newer vehicle more frequently and reduce your overall running costs. Additionally, all-inclusive novated leasing helps you manage your finances better by including everything you need to run your car – insurance, registration, maintenance and fuel.