Australia: Duties Act Bulletin - vehicles sold as 'drive-away-deal'

Last Updated: 1 August 2012
Article by Amanda Verratti

Increases in charges by the Victorian Transport Accident Commission (TAC) and fees under the Road Safety Act 1986 affect Licensed Motor Car Traders (LMCTs) who sell motor vehicles on a 'drive-away-deal' basis.

There has also been an increase (effective 1 July 2012) in the rate of duty (from $5 to $6 per $200 or part) on an application to register a new or near new passenger car, the dutiable value of which is below the Commonwealth's luxury car tax threshold.

The following guidelines are to be used in calculating 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 2012.

Key factors

The following factors must be considered when calculating the dutiable value of a motor vehicle that is subject to a 'driveaway-deal':

  • any trade-in allowance is not to be deducted from the dutiable value of the 'drive-away-deal' price
  • if an agreement for sale was entered into before an application for registration or transfer of registration is made, the value of accessories or options to be fitted to the vehicle (including protective products or vehicle additions) must be included in the dutiable value of the 'drive-away-deal' price. This is regardless of whether the accessories or options are ordered or invoiced separately to the vehicle
  • dealer delivery fees must be included in the dutiable value component of the 'drive-away-deal' price, and
  • there is to be no discount on the dutiable value of the 'drive-away-deal' price for the amount of GST (if any) payable on the supply of the vehicle.

New vehicle sales

From 1 July 2010, as part of the 2010 State Budget, the Victorian Government aligned the thresholds for calculation of motor vehicle duty for new and near new passenger cars with the general Commonwealth luxury car tax threshold.

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).

Please note that 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.

Former demonstrator vehicles

Duty is payable upon 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 previously 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.

Used vehicle sales

Sales of used vehicles on a 'drive-away-deal' basis are not as common as they are for new vehicles. However, the formula used to calculate the dutiable value for 'drive-away-deal' sales of used vehicles is the same as that described for new vehicles.

Please refer to Table 1 for the rates used to calculate the dutiable value of used vehicles and Table 2 for examples of calculations of the dutiable value of 'drive-away-deals'.

Refer to tables over page

Table 1: Figures used to calculate dutiable value on 'drive-away-deals'

Type of Car 'Drive-away-deal price (including registration) Registration costs to be deducted Relevant Dividing Factor to convert 'drive-away-deal' price to dutiable value
New $0-$61,635 $728.50* 1.030*
New More than $61,635 $728.50 1.050
New hybrid $0-$61,635 $628.50 1.030
New hybrid More than $61,635 $628.50 1.050
Used No price threshold $34.50 1.040
*The Registration cost and Relevant Dividing Factor also apply to all non-passenger vehicles regardless of the 'drive-away-deal' price

Table 2: Example calculations for dutiable value of 'drive-away-deals'

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 cost $728.50** $628.50** $728.50** $34.50 $34.50
Equals $19,270.50 $53,871.50 $72,271.50 $19,964.50 $62,465.50
Divide by Relevant Dividing Factor 1.030 1.030 1.050 1.040 1.040
Dutiable value $18,709.22 $52,302.43 $68,830 $19,196.63 $60,062.98
Rounded up to the nearest $200 $18,800 $52,400 $69,000 $19,200 $60,200
**The registration costs for new vehicles are based on the motor vehicle registration costs for passenger cars in the High Risk Zone (code 101)

Table 3: General rates of duty for motor vehicles

Type of vehicle Dutiable value Rates of duty
New passenger vehicle*** $0- $59,133 $6 for every $200 or part thereof
New passenger vehicle*** More than $59,133 $10 for every $200 or part thereof
New non-passenger vehicle No threshold $5 for every $200 or part thereof
In all other cases (including used vehicles) No threshold $8 for every $200 or part thereof
*** This includes former LMCT passenger cars registered or transfer of registration within 60 days of initial registration which were previously exempted from duty

This publication is issued by Moore Stephens Australia Pty Limited ACN 062 181 846 (Moore Stephens Australia) exclusively for the general information of clients and staff of Moore Stephens Australia and the clients and staff of all affiliated independent accounting firms (and their related service entities) licensed to operate under the name Moore Stephens within Australia (Australian Member). The material contained in this publication is in the nature of general comment and information only and is not advice. The material should not be relied upon. Moore Stephens Australia, any Australian Member, any related entity of those persons, or any of their officers employees or representatives, will not be liable for any loss or damage arising out of or in connection with the material contained in this publication. Copyright © 2011 Moore Stephens Australia Pty Limited. All rights reserved.

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