Luxury car tax?

[Janus]

I was just wondering if other countries imposed heavy tax penalties on cars that they deem "luxury"?

Basically in Australia luxury car tax applies at a rate of 25% of the value of the car that exceeds the luxury car tax threshold (AUD $55,990 or GBP 23,418). It really doesn't take that much to reach this amount, basic 3 series BMW will put you over that amount, and whilst being built by a "prestige" company it is not what I would call a "luxury" car.

This means that for a BMW 530, valued at AUD $108,800 (GBP 45,540), you would pay an extra $13,202.50 (GBP 5,546) in luxury car tax. And a BMW 545, valued at AUD $ 154,800 (GBP 64,802), you would pay an extra $24,702.50 (GBP 10,338).

Both my Monaro (AUD $65,000) and Caprice (AUD $80,000) are classified as such, even though they are built less then an hour from my house.

I find this ridiculous as it means that the government charges you 25 cents for every dollar that your car goes over this, really quite low, value, thus forcing the price of "luxury" cars up even higher.

This is of course on top of the hefty import tariffs that the government charge on foreign vehicles, thus forcing this amount up even more, that they claim is to protect Australia's domestic vehicle manufacturing market.

This in turn wouldn't be so bad if the Australian car market wasn't about 10 years behind the rest of the world. We produce quiet nice cars mechanically, a perfect example is the Monaro...before they went screwing around with it for the American market, but in terms of luxury, interiors etc. we drop the ball.

I was just wondering other countries had such stupid tariff and taxation laws in place? And what other Australian's think of our laws.

The only solus I can take it that our Prime Minister is talking about lowering the amount paid by those in the maximum income tax bracket from 47 cents in the dollar to 30 or so. About time! I'm sick of working hard and having to give the government half my money on over three quarters of my salary.

[watto]

Well, recently, car tariffs were reduced earlier this year to 10% and by 2010, it will be further reduced to just 5%... This was down from the 15% which had been in place for many years. So really, the tariffs aren't that huge and thus, car prices are going to fall.

I agree that the $55, 990 threshold is far far too low. You are quite right with the 3-series example. The 320i(with Steptronic) and a few extras will tip you over that and even the C180K is $1K over the threshold without options!!! They are made in a prestigious stable but I find it hard to call them luxury cars, a base Falcon and Commodore has more room and more power!

I'd give it a few years before the maximum tax bracket is no longer 47c... They're already putting in place moving the thresholds and will be raising them again next FY... Then there's the matter of politics and so-forth, red tape and all that crap...

[SL65]

Basically in Australia luxury car tax applies at a rate of 25% of the value of the car that exceeds the luxury car tax threshold (AUD $55,990 or GBP 23,418).

Now wait, I thought LCT tax was 35% in Aus


^MB Aus website

Also, this is where being 15 kinda shows...do you mind explaining to me stamp duty? Thats an additional cost on top of everything yeh?

[Janus]

You are quite right with the 3-series example. The 320i(with Steptronic) and a few extras will tip you over that and even the C180K is $1K over the threshold without options!!!

There is also the fact that for business user you can only claim the depreciation of luxury cars at 11%. So if you have a 320i you can claim 11% depreciation or if you have a 745 (which would depreciate a great deal more a lot faster) you can only claim 11%.

I'd give it a few years before the maximum tax bracket is no longer 47c

Really? I heard Howard on the news the other day saying that next financial year only 3% of people will be paying the maximum tax rate.

[Janus]

Also, this is where being 15 kinda shows...do you mind explaining to me stamp duty? Thats an additional cost on top of everything yeh?

Wow! You are only 15. I always pictured you as 17-20 or so.

It is a bit hard to explain over the internet without getting very technical. Basically there are various layers of extra fees and charges that you need to pay, each compounds on top of each other to force the amount up even more.

You take the price of the car (lets say $100,000), add import tarrif, not sure what that is lets say 25% to make it easy ($100,000 + 25% = $125,000), add luxury car tax ($125,000 + 25% = $156,250), you then pay stamp duty, generally 2-5% depending on what state you live in, on this, the final for the car ($156,250 + 5% = $164,062.50).

So you $100,000 car will end up costing you $164,062.50.

These figures are rough of course and done in a couple of minutes. So please correct me if I'm wrong, this is what I pay my accountants ALOT of money for.

[watto]

Originally Posted by Janus

Really? I heard Howard on the news the other day saying that next financial year only 3% of people will be paying the maximum tax rate.

I don't know what to believe anymore... Too confusing. I'll start to worry about tax brackets when I start earning a non-uni-student-wage

Originally Posted by SL65AMG~V12~604BHP!!!!!!!

Also, this is where being 15 kinda shows...do you mind explaining to me stamp duty? Thats an additional cost on top of everything yeh?

Basically, a cars price when listed in a brochure/newspaper/magazine is the RRP*. There will usually be a little asterix next to that price, have a read of the fine print, you'll notice that it says "Dealer delivery and statutory charges apply".

When this is written, it means that on top of the RRP, you'll pay an extra $1,500 or so for the dealer to do the paper work for you. They will register the car, they will bring the car from wherever to the dealership, they will make sure the car has the basic 3rd party insurance. By paying the extra $1,500 (or so), you're covering the costs they outlaid doing all that for you...

Basically, you need to pay them these costs because a: It's more convenient for you letting them do it and b: You couldn't take delivery of it if these things weren't done.

If any of the above is incorrect, please feel free to correct me

EDIT:

So you $100,000 car will end up costing you $164,062.50.

$164,062.50 + $1,500 = 165,562.50... Just a tad more than the original $100,000. Also just realised that he only wanted to know what stamp duty was.... Ah well, he now roughly knows what the extra charges are too


*Recommended Retail Price

[Ultra_Kool_Dude]

I prefer consumption type taxes to taxes on capital gains and income.

[Janus]

Hehehe, dealer delivery is one I've always had a problem with when buying Holden's, like my Caprice and Monaro.

They charge about $2,000 or something to move them from the factory to the showroom...a total of about 50kms!

Hell I should ask if I can go and pick it up from the factory and save the money next time.

Mercedes let me do it with the S-600. I caught the Euro-Star with a couple of friends, got the car, got a sweet tour of the factory and some free stuff and spend 4 days driving it back to London. 8)

[Janus]

I prefer consumption type taxes to taxes on capital gains and income.

At least you can "fudge" the capital gains tax figures by the percentage of personal use you declare.

I spent 2 hours with a BMW accountant the other afternoon as he told me all kinds of thing "that he wasn't telling me" whilst explaining how much a 5 or 7 series would cost.

He was basically telling me what to claim, what forms to file to reduce the tax payments and how much percentage of business usage to claim before the tax department would get suspicious and audit me.

[SL65]

Mercedes let me do it with the S-600. I caught the Euro-Star with a couple of friends, got the car, got a sweet tour of the factory and some free stuff and spend 4 days driving it back to London. 8)

That would have been nice...new car, long drive and ur mates...did you let them drive!??

Hehehe, dealer delivery is one I've always had a problem with when buying Holden's, like my Caprice and Monaro.

They charge about $2,000 or something to move them from the factory to the showroom...a total of about 50kms!

Yeh thats $2498 with Mercedes. What a bitch! All they do is remove some stickers, insert carpets and enjoy driving YOUR car!! Look at some of the charges here. Stamp Duty is $6K!!

[Janus]

What is CTP?

[GTI WR6]

in bangladesh, if you want to import a vehicle with an engine capacity of 2.0L or more, then you have to pay the price of the car + 150% of the price of the car.

sux, innit.....

even then people buy cayennes and amg mercs, etc.

[SL65]

Originally Posted by Janus

What is the second item on that list? The one for $2,498.

And CTP?

"Pre Delivery"...inserting carpets and claiming your car as their own
CTP - Compulsary Third Party insurance

[SL65]

Originally Posted by GTI WR6

in bangladesh, if you want to import a vehicle with an engine capacity of 2.0L or more, then you have to pay the price of the car + 150% of the price of the car.

sux, innit.....

even then people buy cayennes and amg mercs, etc.

Yeh and here are us Aussies complaining about 35%

[flyingfridge]

CTP only happens in NSW.

[freakster_991]

haha they got cayennes in bangladesh..??? last time i wnt there ppl were happy cuz of the new beemer nd merc showrooms being opened....haha wit such nice cars...where would u drive thm????

[p0w3r]

Wow im glad im the the US...(wow i cant believe i just said that )


For the US you just need to pay if your car is condsidered a "gas guzzler":

at least 22.5
No tax
at least 21.5, but less than 22.5
$1000
at least 20.5, but less than 21.5
$1300
at least 19.5, but less than 20.5
$1700
at least 18.5, but less than 19.5
$2100
at least 17.5, but less than 18.5
$2600
at least 16.5, but less than 17.5
$3000
at least 15.5, but less than 16.5
$3700
at least 14.5, but less than 15.5
$4500
at least 13.5, but less than 14.5
$5400
at least 12.5, but less than 13.5
$6400
less than 12.5
$7700

They calculate this with the combined fuel economy MPG value of 55 % city and 45 % highway. Though this tax is given the auto manufactures and not the consumer, almost always the auto manufacture would pass down the cost of the tax to the consumer.

ok, now i bet your all wondering now why there are still so many big gas eating cars and trucks in the us, but well theres a tiny thing with the gas guzzler tax. The tiny thing being that it only applies for cars.

[hajj]

Wow that's like nothing the taxes and the limits they apply to. 22.5mpg (US gallons I suppose ) and you pay no taxes at all? That wouldnt even be considered as a economical vehicle in Europe, that's not even average.
Are there tarrifs or any other import taxes in the US for foreign cars?
Do you pay VAT on cars?

[CyberMonkey]

Well, I think it is a smart thing to do for a governement.
Fast, luxurious, rare, special cars don't do anything useful in fact, and the people buying them are supposed to be able to pay the extra tax with ease. I mean, you don't buy an expensive car when you live in a caravan, and if you do, it's your own dumb fault.
And see what: the cars cost a lot more, and STILL people are buying them. So what's the problem?

My opinion is: if you can't afford it, don't buy it. On the other hand, if you can afford it, just enjoy your car!

[Top Gear Girl]

Originally Posted by Janus

I was just wondering if other countries imposed heavy tax penalties on cars that they deem "luxury"?

Officially the UK doesn’t but it taxes cars with bigger engines more. So in theory as luxury cars have bigger engines then they pay more. I think it’s a bit left wing to charge people more because they drive a certain type of car, and grossly unfair. It puts in place a system, whereby someone who is a multi-millionaire pays the same to drive a car with a V8 engine as a lowly factory worker. But, having said that I am not in favour of any tax on cars. Full stop. Especially, those levied on cars due to their size or power, etc. At the end of the day, there should be total equality on the road. After all if there is a traffic jam, I still have to sit in and obey the speed limit. There is no exemption because a drive a fancy car. So if you want me to pay more to drive a bigger car, then I want something in return, an exemption from speed limits or a VIP lane on the motorway perhaps. Of course not, so then if we are all treated the same; we should all pay the same, regardless of what we drive, Mini or Rolls Royce.