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Publication-D01-16

The amount of motor vehicle duty which has to be paid under the Duties Act 2000 depends on the dutiable value of a motor vehicle.

There are two rates of duty for new and near new passenger cars. The rate applied depends on whether the dutiable value is above the Commonwealth luxury car tax threshold or not. This threshold is $64,132 for the 2016-17 financial year. 

Motor vehicle duty rates 2016-17

These guidelines should be used to calculate the dutiable value of new and used motor vehicles sold as part of a "drive-away deal" where the date of registration or transfer of registration is on or after 1 July 2016.

They take into account the 2016-17 Victorian Transport Accident Commission charges and 2016-17 fees under the Road Safety Act 1986 that affect licensed motor car traders (LMCTs) who sell motor vehicles on a "drive-away deal" basis.

Key factors

The following factors must be considered when calculating the dutiable value of a motor vehicle that is subject to a "drive-away deal":

  • Any trade-in allowance is not to be deducted from the dutiable value of the "drive-away deal" price,
  • If an agreement for sale was entered into before an application for registration or transfer of registration is made, the value of accessories or options to be fitted to the vehicle (including protective products or vehicle additions) must be included in the dutiable value of the "drive-away deal" price regardless of whether the accessories or options are ordered or invoiced separately to the vehicle,
  • Dealer delivery fees must be included in the dutiable value component of the "drive-away deal" price, and
  • There is to be no discount on the dutiable value of the "drive-away deal" price for the amount of GST (if any) payable on the supply of the vehicle

New vehicle sales

New vehicles may be sold as part of a "drive-away deal". In order to calculate the dutiable value of the "drive-away deal", registration costs must be subtracted from the "drive-away deal" price with the balance then divided by the Relevant Dividing Factor (as set out in Table 1).

The registration costs listed in Table 1 are to be used, irrespective of whether the actual registration costs of the vehicle are of a lesser amount.

Former demonstrator vehicles

Duty is payable on an application for the transfer of registration of a demonstrator motor vehicle (which is a passenger car) pursuant to the rates set out in Table 1. For the purposes of Table 1, a demonstrator motor vehicle is a motor vehicle that was:

  • Initially registered in Victoria in the name of an LMCT that has not been previously registered elsewhere, and
  • Within 60 days of initial registration of the motor vehicle, no duty has been paid in relation to:
    • an application for registration or transfer of registration of the motor vehicle, or
    • as a result of the change of use of the motor vehicle

Used vehicle sales

The formula used to calculate the dutiable value for "drive-away deal" sales of used vehicles is the same as that described for new vehicles.

Please refer to Table 1 for the rates used to calculate the dutiable value of used vehicles and Table 2 for examples of calculations of the dutiable value of "drive-away deal".  

If you require further information you can contact us.

Table 1: Figures used to calculate dutiable value on "drive-away deals"

Type of car "Drive-away deal" price (incl registration) Registration costs to be deducted Relevant dividing factor to convert "drive-away deal" price to dutiable value
New $0 - $67,007 $823.00* 1.032*
New More than $67,007 $823.00 1.052
New hybrid $0 - $66,907 $723.00 1.032
New hybrid More than $66,907 $723.00 1.052
Used No price threshold $38.30 1.042
*The registration cost and relevant dividing factor also apply to all non-passenger vehicles regardless of the "drive-away deal" price

Calculation anomaly

Table 1 indicates that $67,007 ($66,907 for hybrid vehicles) is the "drive-away deal" price threshold for new passenger cars that will determine the rate of duty that will apply.

However a mathematical anomaly has been identified with respect to new passenger cars that have a "drive-away deal" price in the following ranges:  

For new passenger cars: $67,008 - $68,290
For new hybrid passenger cars: $66,908 - $68,190

When the "drive-away deal" price is converted to a dutiable value, using the figures supplied in Table 1 and the methodology set out in Table 2, the resulting dutiable value is actually less than the current luxury car tax threshold of $64,132. The rate of duty applicable to dutiable values of up to $64,132 is $6.40 per $200, or part thereof.

The State Revenue Office acknowledges that where a new passenger car "drive-away deal" price has been treated in strict accordance with these guidelines and the resultant dutiable value is less than or equal to $64,132, the rate of $6.40 per $200 or part thereof shall apply. 

Table 2: Example calculations for dutiable value of "drive-away deals"

Type of car Example 1. New car Example 2. New hybrid car Example 3. New car Example 4. Used car Example 5. Used car
"Drive-away deal" price $19,999 $54,500 $73,000 $19,999 $62,500
Less registration costs $823.00** $723.00** $823.00** $38.30 $38.30
Equals $19,176.00 $53,777.00 $72,177.00 $19,960.70 $62,461.70
Divide by relevant dividing factor 1.032 1.032 1.052 1.042 1.042
Dutiable value $18,581.40 $52,109.50 $68,609.32 $19,156.14 $59,944.05
Rounded up to the nearest $200 $18,600 $52,200 $68,800 $19,200 $60,000
** The registration costs for new vehicles are based on the motor vehicle registration costs for passenger cars in the high-risk zone (code 101)