What is the PHEV FBT Exemption?
The Plug-In Hybrid (PHEV) Fringe Benefits Tax (FBT) exemption has been a significant incentive for Australians looking to purchase or lease a PHEV through a novated lease. This exemption meant that employers could provide PHEVs to employees without incurring FBT, making these vehicles more affordable for many. An employee effectively pays for an elegible PHEV and its associated running cost 100% pre-tax which could save them thousands.
When is the PHEV FBT Exemption Ending?
The FBT exemption for Plug-In Hybrid Electric Vehicles in Australia is set to conclude on March 31st, 2025. This change will impact individuals and businesses considering PHEVs for their next vehicle acquisition.
How Will This Affect Novated Leasing for PHEVs?
New Leases: To benefit from the current FBT exemption, your PHEV lease must be settled and the vehicle delivered before March 31, 2025.
Existing Leases: If you currently have a PHEV under a novated lease, be aware that any changes like refinancing or extending the lease after April 1, 2025, will remove the FBT exemption status.
Why This Change Matters
The removal of the PHEV FBT exemption could lead to a noticeable increase in lease costs for new PHEV acquisitions, potentially making these vehicles less appealing compared to other options like Battery Electric Vehicles (BEVs) or traditional hybrids which might still qualify for tax benefits.
What Can You Do Before the Deadline?
Act Quickly: If you're considering a PHEV, now is the time to finalize your novated lease to secure the tax advantages.
Consult Experts: Speak to a financial advisor or a novated leasing specialist to understand how this change impacts your financial planning.
Future of Electric and Hybrid Vehicles in Australia
While the exemption for PHEVs is ending, there's still strong support for electric vehicles through other incentives. Keep an eye on government policies that might introduce new benefits for eco-friendly vehicles.
FAQs About the PHEV FBT Exemption Ending
Can I still benefit from the FBT exemption if I lease now?
Yes, as long as your lease is settled and the vehicle delivered before April 1, 2025.
What happens if I change jobs after the exemption ends?
A new novation agreement might mean your PHEV will no longer be FBT exempt.
Will there be any extensions to the PHEV FBT exemption?
Currently, there are no plans for extension, but keep informed about potential legislative changes.
Conclusion
The impending end of the PHEV FBT exemption marks a significant shift in how Australians might approach vehicle leasing. It's crucial for potential buyers to understand the implications and act swiftly if they wish to capitalize on current benefits. Stay updated with automotive industry news and policy changes to make informed decisions on your next vehicle purchase.
To see how novated leases can create massive savings for you try our novated lease calculator or contact the Easi team today!
