Thinking about a premium EV? The timing matters
If you're thinking about salary packaging a premium electric vehicle, the EV FBT exemption changes are worth understanding before you decide. Under changes announced by the Australian Government in May 2026, from 1 April 2027 the full FBT exemption will only apply to new leases on EVs valued at $75,000 or less. It was previously available to vehicles under the luxury car tax limit ($91,661).
This means, for EVs over $75,000, and under $91,661, this could be your last chance to package a luxury EV and obtain the pre-tax benefits of the FBT exemption. That makes the timing of your lease important. Here's what's changing, who it affects, and why Territorians looking at a premium EV should order by 30 November.
Things you need to know
- What is the EV FBT exemption?
The EV FBT exemption lets employees salary package an eligible electric vehicle through a novated lease without paying fringe benefits tax. It has applied since 1 July 2022.
In practice, it means you can pay for the car and its running costs, including finance, charging, tyres, servicing, registration and insurance, from your pre-tax salary. Because you're paying with pre-tax dollars, the savings can be significant, and they're generally larger for higher earners. On some of these luxury EVs, we see tax savings more than $50,000 over the term of the lease.
One thing worth knowing: an FBT-exempt EV still appears on your income statement as a reportable fringe benefit. It doesn't add to the tax on your salary, but it can count in some income tests, such as for HELP repayments and the Medicare levy surcharge.- What's changing from 1 April 2027?
The Australian Government announced the changes in May 2026. Here's how they apply to new leases:
- Until 31 March 2027: Nothing changes. Eligible EVs valued under the luxury car tax threshold for fuel-efficient vehicles (currently just over $91,000) keep the full FBT exemption.
- From 1 April 2027: The full exemption is set to apply only to EVs valued at $75,000 or less. EVs valued between $75,000 and the luxury car tax threshold are set to receive a 25% discount on FBT instead.
A 25% discount still has value, but it's a big step down from paying no FBT at all. For an EV over $75,000, a lease that starts after 1 April 2027 could cost tens of thousands more.
- How the $75,000 threshold works
For FBT purposes, an EV's value includes the base price, GST, dealer delivery and any options. It doesn't include stamp duty or registration.
That detail matters. Two versions of the same model can land on different sides of $75,000 depending on options like premium paint or larger wheels. The same applies at the top end, where options can push a vehicle over the luxury car tax threshold and out of the exemption altogether.
If the EV you're considering is close to either threshold, check the exact specification before you order. The AANT team can do this for you.- If you already have a lease, or your EV is under $75,000
If your EV novated lease is in place before 1 April 2027, the Government has said it won't be affected. The full exemption is set to continue for the life of that lease. Changing or extending a lease may affect this, so talk to your provider before making changes.
If the EV you want is valued at $75,000 or less, the 1 April 2027 change doesn't affect it. Many popular EVs sit under this price, and AANT has a range of electric vehicles to suit every budget.- Why Territorians should order by 30 November
For EVs over $75,000, the date that matters in the Territory is much earlier than 31 March.
Your lease needs to be in place before 1 April 2027. Vehicles take longer to reach the Northern Territory, and there are finance and employer approvals to work through before a lease can start. Demand for EVs is also expected to rise across Australia as the deadline gets closer, which can stretch wait times further.
That's why AANT Salary Packaging recommends Territorians order by 30 November.
EVs in this price range include the BMW iX1 xDrive3, Lexus ES 350e, Mercedes-Benz EQA 250+ and Tesla Model Y Performance, which all sit above $75,000. (Link each to its deal page.)
Talk to a local team
The EV FBT exemption changes won't affect everyone, but if you're considering an EV over $75,000, the next few weeks matter. Ordering by 30 November gives you the best chance of having your lease in place before 1 April 2027 and keeping the full exemption for the life of the lease.
If you're not sure what's right for your budget or the way you drive, the AANT Salary Packaging team can help.
Call 08 8980 5799 or get a quote online.