Licensed motor car traders
Guidance for licensed traders on motor vehicle duty and refunds.
Key information
Motor vehicle duty applies when:
- a motor vehicle is first registered
- registration is transferred into someone else’s name
- the use of a motor vehicle changes.
Duty is calculated on the dutiable value of the vehicle.
If you are a licensed motor car trader (LMCT), you have responsibilities under the Duties Act 2000 for registering vehicles and paying duty. Different requirements apply depending on whether the vehicle is new, used or has a change of use. Exemptions may apply for vehicles used as trading stock, demonstrator vehicles and service demonstrator vehicles.
Registration, transfer and paying duty
See the current duty rates or estimate the duty payable using the motor vehicle duty calculator.
New vehicles
You must register a new vehicle with VicRoads. You can register new vehicles directly into a customer’s name or into your own name.
Duty must be paid to VicRoads at the time you apply for registration unless an exemption applies.
Used vehicles
You must lodge the transfer of registration of a used vehicle into the buyer’s name with VicRoads. You must pay the duty and transfer fee within 14 days of delivering the vehicle.
Both the buyer and the LMCT are jointly and severally liable to pay the duty. If you, as an LMCT, collect the duty from the buyer, you are solely liable for paying it to VicRoads.
Drive-away deals
New vehicles may be sold under a drive‑away deal. In these cases, duty is payable on the dutiable value of the vehicle, not the drive‑away deal price.
See the current guidelines for 2025–26 drive‑away deals.
Change of vehicle use
A change of vehicle use occurs when a vehicle that was exempt from duty is no longer used as trading stock, a demonstrator vehicle or a service demonstrator vehicle.
When this happens, the LMCT must notify us within 14 days.
We assess the duty payable and issue an assessment. Duty is calculated on the dutiable value of the vehicle at the time the change of use occurs and is payable to us, not VicRoads.
Further guidance on when a change of use occurs is set out in Revenue Ruling DA-035v2.
Exemptions for LMCTs
LMCT exemptions depend on the type of motor vehicle trading business:
- Wholesale dealings in motor vehicles, you may be entitled to an exemption for vehicles used solely as trading stock.
- Retail dealings in motor vehicles, you may be entitled to an exemption for:
- vehicles used predominantly as trading stock or demonstrator vehicles
- service demonstrator vehicles.
A service demonstrator vehicle is used to demonstrate and promote the sale of motor vehicles of the same class. It is typically provided free of charge to a customer while their vehicle is being serviced.
These exemptions apply only while the vehicle continues to be used for the exempt purpose. If the vehicle’s use changes, duty may become payable. See the change of use section above.
For detailed eligibility requirements, conditions and examples, see exemptions and concessions for motor vehicle duty.
Refunds
LMCTs can request a duty refund in certain circumstances, such as:
- overpayment
- sale cancellation
- incorrect registration
- double payments.
Request an LMCT refund to arrange for VicRoads to authorise a refund.
Compliance
We conduct compliance activities, including data matching, to:
- validate the dutiable values you declare on applications for registration and transfer
- verify eligibility for any duty exemptions applied to individual vehicles.
Penalties may apply if you undervalue motor vehicles or incorrectly claim exemptions.