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Motor vehicle depreciation cost price limit announced



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Nat 98/26

MOTOR VEHICLE DEPRECIATION COST PRICE LIMIT ANNOUNCED

Tax Commissioner Michael Carmody today announced that the indexed cost price for motor vehicle depreciation would not change in 1998-99.

The indexation factor, derived from a formula contained in the income Tax Assessment Act 1997, and used to calculate the depreciation limit for 1998-99, was 0.943. The Treasurer announced last year that the income tux legislation would be changed so that where the indexation factor is below I, it is to be taken as 1. This change was effective for the 1997-98 financial year and for future years. Therefore the indexed motor vehicle cost price limit for 1998-99 remains at $55,134.

"The depreciation cost price limit rules apply to motor cars and station wagons including four-wheel drive vehicles. If the cost of the vehicle exceeds the limit for the financial year in which the vehicle is first used, its depreciable cost is deemed to be equal to the limit,” Mr Carmody said.

"Depreciation deductions are not available for any pan of the cost of a motor vehicle which exceeds the cost price limit.”

Also announced today was th* sales tax threshold for luxury motor vehicles.

“As a result of the Treasurer’s announcement concerning the indexation factor, the taxable value threshold for sales tax purposes for ‘luxury* vehicles is $36,995, also the same as Iasi year.

“For the 1998-99 year, motor vehicles priced with a taxable value above $36,995 are subject to sales tax at the rate of 45 per cent on the portion of the taxable value of the vehicle exceeding $36,995,” Mr Carmody said.

This rate applies to motor cars and station wagons, including four-u'heel drive vehicles, except for vehicles adapted to carry disabled persons seated in wheelchairs.

CANBERRA 1 June 1998

Contact: Corporate Affairs and Marketing (02) 6216 1901 (hh) "

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