NOVATED LEASE & EV OWNERSHIP
EV Novated Lease FBT Exemption: 2026 Rules and 2027 Changes
The Australian electric-car FBT exemption can affect the economics of an eligible novated lease, but it has important conditions.
Reviewed 26 October 2026 · General information only · No finance applications, referrals or personalised tax advice
EV lifestyle
More confidence in the decision. More freedom on the road.
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01 / Choose your EV
Research the exact Australian model and variant before comparing costs.
Continue research02 / Explore the numbers
Adjust the lease term, residual, charging and operating costs.
Continue research03 / Check eligibility
Understand the rules and questions to take to your employer or provider.
Continue researchPractical guidance
The decisions behind the drive.
01 / GUIDE
Understand the arrangement
The ATO requires qualifying car benefits, vehicle and recipient conditions, relevant first-held-and-used dates and no luxury car tax payable on the vehicle. Check the current threshold and transaction details.
Explore vehicles02 / GUIDE
See the full cost
From April 2025, new plug-in hybrid arrangements generally ceased qualifying, subject to narrow grandfathering. A battery-electric car and a PHEV must not be presented as equivalent for FBT.
Test the costs03 / GUIDE
Choose your next step
The government announced staged changes from April 2027, including a $75,000 dividing line for full exemption in its proposal. Verify enacted legislation, transitional rules and individual eligibility before relying on announced policy.
Understand FBT conditionsPolicy source check / 26 October 2026
The announced transition, at a glance.
This table summarises the government's announcement and Treasury's consultation draft. It does not establish that draft wording has become law or that a particular vehicle, contract or employee qualifies. Check the enacted legislation and current ATO guidance before relying on a tax outcome.
| Period | Announced policy |
|---|---|
| Until 31 March 2027 | The existing eligible-EV exemption continues under the government's announced timetable. Existing eligibility conditions still matter. |
| From 1 April 2027 | Eligible EVs above $75,000, but within the relevant luxury-car-tax condition, move to a 25% discount on payable FBT. The full exemption continues for qualifying commitments for eligible EVs at $75,000 or less before 1 April 2029. |
| From 1 April 2029 | The announced ongoing concession is a 25% discount on payable FBT for eligible EVs. Transitional treatment of earlier commitments needs separate checking. |
A 25% FBT discount is not a 25% discount on the vehicle price. It refers to the FBT otherwise payable. Do not use it as a personal savings estimate.
Questions to take to your provider or adviser
Which vehicle value and commitment date apply? Is the exact Australian variant eligible? How do renewals or changes affect transitional treatment? What reportable fringe benefits and income-test effects remain? Request an explanation tied to the actual contract, not just a headline.
Sources: Treasury consultation and draft documents; government announcement.
Explore costs without assuming a personal tax savingBefore you commit
Four things to check.
A headline payroll deduction does not establish the total cost or guarantee a tax saving. Compare the same vehicle and term.
Calculate a scenario01
Employer eligibility
Confirm your employer supports the arrangement and what happens if employment changes.
02
All finance costs
Ask for the drive-away price, interest and itemised fees.
03
Residual and early exit
Check the end-of-term obligation and termination conditions.
04
Current tax rules
Verify current ATO conditions and your circumstances with qualified professionals.
Continue your EV journey.
Official and supporting sources
EVITAL publishes educational information only. No finance provider applications or referrals are offered on this page. EVITAL does not provide lease quotes, arrange credit, recommend financial products or calculate personal tax outcomes. Confirm current legislation, vehicle eligibility and contract terms with relevant professionals and providers.