The car limit for the 2026 income year is $69,674. This is the highest value that a taxpayer can use to calculate depreciation on a car where they use the car for work or business purposes and they first use or lease the car in the 2026 income year.

If a taxpayer is buying a car and the price is more than the car limit, the highest input tax (GST) credit they can claim (except in certain circumstances) is one-eleventh of the car limit. For the 2026 income year, the highest input tax credit they can claim is $6,334 (i.e., one-eleventh of $69,674).

The luxury car tax (‘LCT’) threshold for the 2026 income year is $91,387 for fuel-efficient vehicles, and $80,567 for all other luxury vehicles.

Input tax credits need to be claimed within the four year time limit. A taxpayer cannot claim an input tax credit for luxury car tax when they buy a luxury car, even if they use it for business purposes.

If you have any questions or would like to speak to one of our professional business and tax advisors, please contact our office on (08) 9392 7600 to make a booking or click here.

With three offices across Western Australia and over 20 years of experience, Acclaim Accounting is a dynamic team of highly trained and skilled individuals committed to providing innovative and effective advice, excellent service and maintaining only the highest standards in ethical professional practice