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A List of FBT Free Eligible Vehicles in Australia

FBT Exemption for Electric Vehicles (EVs) and Plug-in Hybrid Electric Vehicles (PHEVs)

The Fringe Benefits Tax (FBT) exemption continues to apply to electric vehicles (EVs) as long as they meet certain criteria, especially for those being used as part of a novated lease.. Fully electric vehicles remain exempt from FBT in 2025, provided they are used by employees for business and limited private use, and are first held and used on or after July 1, 2022.

Important Update: From April 1, 2025, PHEVs will no longer be eligible for the FBT exemption as they no longer meet the low-emission criteria. However, vehicles that were first used between July 1, 2022, and April 1, 2025, may still be eligible until the end of the novated lease agreement.

List of Eligible Electric and Hybrid Vehicles for FBT Exemption (as of 2025)

Here is an up-to-date list of EVs and PHEVs eligible for the FBT exemption in 2025, based on the latest Australian Taxation Office (ATO) guidelines and is courtesy of the Electric Vehicle Council

  • BYD ATTO 3
  • Ford Escape PHEV
  • Hyundai Ioniq 5, Ioniq 6, Kona
  • Hyundai Kona Electric
  • Mazda MX-30 Electric
  • Lexus UX300E
  • Kia EV6, Niro EV, Sorento PHEV
  • Mitsubishi Outlander PHEV
  • Mercedes-Benz EQA 250, EQB 250
  • MG ZS EV
  • MG HS Plus EV
  • Peugeot e-2008, 3008, 508 PHEV
  • Mitsubishi Eclipse Cross PHEV
  • Nissan LEAF
  • Mini Cooper SE, Countryman Cooper SE
  • Tesla Model 3, Model Y
  • Polestar 2, 4
  • Mercedes-Benz A 250e
  • Cupra Leon VZe
  • Cupra Formentor VZe
  • BMW iX1, iX2, iX3
  • Kia Sorento PHEV
  • Volvo XC40 Recharge Pure Electric
  • Volvo C40 Recharge
  • Cupra Born, Formentor VZe
  • Fiat 500e
  • Renault Megane E-Tech

Note: Only vehicles first used after July 1, 2022 are eligible, and they must be used primarily for business purposes with limited private use.

FBT Exempt Vehicles – The Key Criteria

For a vehicle to qualify for the FBT exemption, it must meet the following conditions:

  1. Used by a Current Employee: The vehicle must be used by the employee or their associates, such as family members.
  2. Luxury Car Tax (LCT) Considerations: The vehicle must be under the Luxury Car Tax threshold:
    1. $91,387 for EVs.
    2. $80,567 for other vehicles.
  3. Use for Work-Related Purposes: The vehicle must be provided principally for work tasks such as travel to and from the office, and only minor private use is allowed.

Updated for 2025: PHEVs, such as the Ford Escape PHEV and Mitsubishi Outlander PHEV, will no longer qualify for the exemption from April 2025.

Exemption for Plug-In Hybrid Electric Vehicles (PHEVs)

PHEVs, which were previously eligible for the FBT exemption, will no longer qualify after April 1, 2025. However, PHEVs purchased before this date can still be eligible for FBT exemption as long as they are under a novated lease agreement that was signed before this date. After this, PHEVs will be treated as regular vehicles and subject to FBT unless they meet specific criteria.

Updated Policy: If you are leasing a PHEV after April 2025, FBT exemption will no longer apply, so it’s crucial to plan accordingly and consider fully electric alternatives like the Tesla Model 3 or BMW iX3, which remain FBT-exempt. You can explore why electric vehicles and novated leasing are a perfect match for long-term savings and sustainability.

Popular Non-Electric Vehicles Eligible for FBT Exemption

Aside from electric vehicles, certain non-electric vehicles may still qualify for FBT exemption if they meet the following requirements:

  • Single-Cab Utes with a carrying capacity of at least 1 tonne.
  • Dual-Cab Utes designed for carrying at least 1 tonne or 8 passengers.
  • Panel Vans or Goods Vans with specific conditions.
  • 4-wheel drive vehicles with a carrying capacity of at least 1 tonne.

New Consideration: Non-electric vehicles that carry at least one tonne or can accommodate 8 passengers may be eligible for the FBT exemption, provided they are primarily used for work purposes.

FBT Exemption for Limited Private Use Vehicles

An FBT exemption can also apply to vehicles with limited private use, such as those used for minor trips like commuting or short personal errands. The key conditions include:

  • No more than 2 km for personal use per trip.
  • Private travel does not exceed 1,000 km per FBT year.
  • Employer policies should limit the private use of the vehicle.

Clarified: Vehicles used for business travel and minimal private use will continue to be eligible for FBT exemption even if they are non-electric, as long as they meet the conditions outlined by the ATO.

FAQs

1. Are hybrid vehicles FBT exempt?

Hybrid vehicles (PHEVs) are currently exempt from FBT until April 1, 2025. After this date, they will no longer qualify unless they meet specific conditions.

2. Can I claim FBT exemption on a used vehicle?

Yes, used electric vehicles (EVs) can be eligible for FBT exemption if they were first used on or after July 1, 2022, and meet all other required conditions.

3. What are the requirements for a vehicle to be eligible for FBT exemption?

To qualify, the vehicle must be used primarily for business purposes, with limited private use (no more than 1,000 km per year or 200 km per trip).

4. Can I use an electric car for private purposes and still qualify for the FBT exemption?

Yes, as long as the vehicle is used principally for business and the private use is limited, the vehicle may remain exempt from FBT.

Get in Touch

For more details on the FBT exemptions for electric vehicles, PHEVs, or any other questions about novated leases, get in touch with us here. Let us help you navigate the best options for your business!