Can You Novated Lease a Used EV?
Yes, you can novated lease a used electric vehicle (EV) in Australia, but there are specific conditions and eligibility criteria you must meet to enjoy the benefits. This option is great for those seeking tax advantages while driving an environmentally friendly vehicle.
Eligibility Criteria for Leasing a Used EV
To novate lease a used EV, the vehicle must meet these conditions:
Vehicle Age: The EV must not be older than 15 years at the end of the lease term. For example, if you’re planning a 5-year lease, the vehicle should be no more than 10 years old when starting the lease.
First Use Date: To qualify for the fringe benefits tax (FBT) exemption under the Electric Car Discount policy, the used EV must have been first registered or used after July 1, 2022. This rule ensures the vehicle falls within the eligibility criteria for tax savings.
Value Limit: The vehicle's value must be below the luxury car tax threshold, which is currently $91,387 for the financial year 2024/25.
Source of Vehicle: You can source the used EV from a dealership or private seller, provided it meets the above conditions.
Benefits of Novated Leasing a Used EV
Tax Savings: A novated lease allows you to use your pre-tax salary to cover vehicle payments and running costs, reducing your taxable income and overall tax bill.
Simplified Running Costs: All running costs, such as maintenance, insurance, charging, and registration, can be bundled into your lease payments, making it easier to budget.
Conclusion
Novated leasing a used EV is an excellent option for reducing your tax liability while enjoying the perks of driving an eco-friendly vehicle. Just ensure the vehicle meets all the eligibility criteria to make the most of the benefits. Speak to a novated lease provider or financial advisor to get a clearer understanding of your options and maximise your savings.
Ready to explore novated leasing options? Contact us today to see how you can drive a used EV and save!