The Federal Government is currently reviewing the FBT exemption on electric vehicles to assess its impact before it decides on the future of the scheme.
As things stand, Australia drivers who take advantage of the FBT exemption stand to save tens of thousands of dollars on the cost of an eligible EV.
There are more than 100 EV models that are eligible for $0 FBT under the scheme through Novated Lease Australia, with new models being added regularly.
Latest on the EV FBT exemption in Australia
EV models eligible for $0 FBT
THROUGH A NOVATED LEASE
These are vehicles with an estimated cost below the luxury car tax threshold, as at March 2026. On-road costs, such as dealer delivery, standard and statutory warranties, accessories, modifications and treatments to the car before it's delivered may impact the cost for the purpose of working out luxury car tax, according to the ATO.
What are the eligibility criteria for the novated lease FBT exemption?
To be eligible for the fringe benefits tax (FBT) exemption on an electric car novated lease, the vehicle you are leasing must be:
A battery electric vehicle or hydrogen fuel cell electric vehicle.
A passenger vehicle designed to carry a load of less than one tonne and fewer than nine passengers.
First held and used after 1 July 2022 (i.e. it was available for use for the first time after this date).
Valued below the luxury car tax (LCT) threshold which is $91,661 for the financial year 2026/27.
If you’re considering a novated lease on a used car, to be eligible for the FBT exemption you may want to consider these specific aspects of the above criteria:
The used vehicle must have been first held and used (i.e. by the original owner) after 1 July 2022. If it was in use at all before that date, it will not be eligible for the FBT exemption, even when purchased subsequently.
The vehicle must never have been subject to LCT. So even if its current sale value is below the LCT threshold, if it was previously subject to LCT (i.e. on a previous sale or when it was imported), it will not be eligible for the FBT exemption.
What types of vehicles do not qualify for the EV FBT exemption?
The following vehicle types will not be eligible for an FBT exemption, even if they are electric. These kinds of vehicles are not eligible to be paid for through a novated lease more broadly, even if you factor out the FBT exemption.
Motorcycles or scooters
Large work vans (i.e. not a passenger vehicle)
Vehicles that can carry a loan of more than one tonne.
Caravans and other motor homes.
In addition, new leases on PHEVs and mild hybrids (i.e. not fully electric vehicles) are not counted as low-emission vehicles for the purposes of FBT exemption eligibility. You can still get a novated lease for these kinds of vehicles – they just won’t be exempt from FBT.
Written by
CEO
Bevan Guest
Bevan is the CEO of Novated Lease Australia. He has more than 20 years of experience in the automotive and financial services industry.
Reviewed by
Editor
Sean Callery
Sean is an editor and finance journalist. He has over 15 years of international experience covering consumer affairs, lending and personal finance.