Announced Announced 5 May 2026 · Applies from 1 April 2027 · Updated
EV FBT exemption: what changes from 1 April 2027
On 5 May 2026, as part of the 2026–27 Federal Budget, the Government announced that the fringe benefits tax (FBT) exemption for electric cars will be narrowed in two steps. This change is announced, not yet law. Nothing changes before 1 April 2027.
Announced timeline
| Period | Electric car cost up to $75,000 | Above $75,000, below the luxury car tax threshold |
|---|---|---|
| Until 31 March 2027 | Full exemption (existing rules) | Full exemption (existing rules) |
| 1 April 2027 – 31 March 2029 | Full exemption (100% discount) | 25% discount on FBT payable |
| From 1 April 2029 | 25% discount on FBT payable | 25% discount on FBT payable |
Cars above the luxury car tax threshold are not covered by the discount in any period.
What the ATO page says about existing arrangements
- The ATO states that existing leases won’t be affected by these changes.
- During the transition, the ATO describes the full discount as applied through a 0% statutory formula rate, and the 25% discount through a 15% statutory formula rate.
Status
This page will be updated when legislation is introduced, when it passes, and when the ATO publishes guidance. The status label at the top of this page will change from Announced to Legislated and then In effect.
Sources
Figures last checked against official sources: . General information, not financial or tax advice.
Page history
: published.