EVs Over $75k Lose the Full FBT Exemption in 2027: Here's What Changes

From 1 April 2027, price starts to matter for the FBT exemption in a way it hasn't before. EVs priced at $75,000 or under keep the full exemption. EVs priced above $75,000 drop to a 25% exemption. Here's exactly where that line falls, and how it's different from the other price threshold you might have heard about.

Two different thresholds, doing two different jobs

It's easy to conflate these, so here's the precise distinction:

• The luxury car tax (LCT) threshold (~$91,661 for 2026–27) determines whether an EV is exemption-eligible at all. Price above this, and there's no FBT exemption to discuss regardless of phase.
• The $75,000 threshold only matters from Phase 2 onward (1 April 2027), and it doesn't remove eligibility. It determines how much exemption an already-eligible EV gets: 100% at or under $75k, 25% above it.

So an eligible EV priced at, say, $85,000 keeps its full exemption today, keeps its full eligibility after April 2027 too (it's still under the LCT threshold), but the exemption itself drops from 100% to 25% because it's over the $75,000 band.

What this actually costs

The exemption directly determines how much of your lease payment can come out of pre-tax salary versus post-tax. Dropping from 100% to 25% exemption means a much larger post-tax contribution is needed to avoid an FBT liability, which flows straight through to a higher total lease cost. The higher your EV's price above $75,000, the larger this effect, since the statutory taxable value the exemption applies to scales with the vehicle's price.

Which cars are unaffected

Anything at or under $75,000 sails through Phase 2 exactly as it would under today's Phase 1 rules: no reduction, no change in treatment. A large share of popular EVs on the market today sit under this line. If yours does too, the only cutoff that eventually affects you is Phase 3, in April 2029, when the exemption flattens to 25% for every eligible EV regardless of price.