The amount of motor vehicle duty which has to be paid under the Duties Act 2000 depends on the dutiable value of a motor vehicle.
These guidelines should be used to calculate the dutiable value of new and used motor vehicles sold as part of a drive away deal where the date of registration or transfer of registration is on or after 1 July 2018.
They take into account the 2018-19 Victorian Transport Accident Commission charges and 2018-19 fees under the Road Safety Act 1986 that affect licensed motor car traders (LMCTs) who sell motor vehicles on a drive-away deal basis.
The rate of motor vehicle duty that is applied for new or near-new passenger cars depends on whether the dutiable value is above the Commonwealth luxury car tax threshold. This threshold is $66,331 for the 2018-19 financial year.
New vehicle sales
New vehicles may be sold as part of a drive-away deal. In order to calculate the dutiable value of the drive-away deal, registration costs must be subtracted from the drive-away deal price with the balance then divided by the relevant dividing factor (as set out in Table 1).
The registration costs listed in Table 1 are to be used, irrespective of whether the actual registration costs of the vehicle are of a lesser amount.
Used vehicle sales
The formula used to calculate the dutiable value for drive-away deal sales of used vehicles deducts the transfer fee from the drive-away deal price with the balance then divided by the relevant dividing factor (as set out in Table 1).
Former demonstrator vehicles
Duty is payable on an application for the transfer of registration of a demonstrator motor vehicle (which is a passenger car) pursuant to the rates set out in Table 1. For the purposes of Table 1, a demonstrator motor vehicle is a motor vehicle that was:
- Initially registered in Victoria in the name of an LMCT that has not been registered elsewhere, and
- Within 60 days of initial registration of the motor vehicle, no duty has been paid in relation to:
- an application for registration or transfer of registration of the motor vehicle, or
- as a result of the change of use of the motor vehicle.
Please refer to Table 1 for the rates used to calculate the dutiable value of vehicles and Table 2 for examples of calculations of the dutiable value of a drive-away deal.
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|Type of car||Drive-away deal price (incl registration)||Registration costs to be deducted*||Relevant dividing factor to convert drive-away deal price to dutiable value*|
|New||$0 - $69,970||$853.50||1.042|
|New||More than $69,970||$853.50||1.052|
|New hybrid||$0 - $69,870||$753.50||1.042|
|New hybrid||More than $69,870||$753.50||1.052|
|Used||No price threshold||$39.70||1.042|
|*The registration cost and relevant dividing factor also apply to all non-passenger vehicles regardless of the drive-away deal price|
Table 1 indicates that $69,970 ($69,870 for hybrid vehicles) is the drive-away deal price threshold for new passenger cars that will determine the rate of duty that will apply.
However a mathematical anomaly has been identified with respect to new passenger cars that have a drive-away deal price in the following ranges:
New passenger cars: $69,971 - $70,633
New hybrid passenger cars: $69,871 - $70,533
When the drive-away deal price is converted to a dutiable value, using the figures supplied in Table 1 and the methodology set out in Table 2, the resulting dutiable value is actually less than the current luxury car tax threshold of $66,331. The rate of duty applicable to dutiable values of up to $66,331 is $8.40 per $200, or part thereof.
The State Revenue Office acknowledges that where a new passenger car drive-away deal price has been treated in strict accordance with these guidelines and the resultant dutiable value is less than or equal to $66,331 the rate of $8.40 per $200 or part thereof shall apply.
|Type of car||Example 1. New car||Example 2. New hybrid car||Example 3. New car||Example 4. Used car||Example 5. Used car|
|Drive-away deal price||$19,999||$54,500||$73,000||$19,999||$62,500|
|Less registration costs||$853.50**||$753.50**||$853.50**||$39.70||$39.70|
|Divide by relevant dividing factor||1.042||1.042||1.052||1.042||1.042|
|Rounded up to the nearest $200||$18,400||$51,600||$68,600||$19,200||$60,000|
|** The registration costs for new vehicles are based on 12 month motor vehicle registration costs for passenger cars in the high-risk zone (code 101)|