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Your Partner in Performance with More Than 30 Years of Leasing Experience
Your Partner in Performance with More Than 30 Years of Leasing Experience
Electric Car Novated Lease

Electric Car Novated Lease

The cheapest way to drive a new electric car

A novated lease lets you pay for a car and its running costs from your salary, mostly before tax. When the car is an eligible electric vehicle, there is no fringe benefits tax (FBT) on it either, so the whole lease, including charging, insurance and servicing, can come out of your pre-tax pay. For many employees that makes an electric car cheaper to drive than the petrol car they have now.

How an electric car novated lease saves you money

  • Pay with pre-tax salary: lowers your taxable income.
  • No FBT on eligible EVs: so there is no need for after-tax contributions to reduce FBT.
  • No GST on the purchase price: the GST saving goes towards the car.
  • Running costs included: charging, servicing, tyres, rego and insurance in one regular payment.

Electric car FBT rules: the timeline

  • Until 31 March 2027: eligible electric cars priced below the luxury car tax threshold for fuel-efficient vehicles ($91,661 for 2026-27) are fully exempt from fringe benefits tax.
  • From 1 April 2027: the Government has announced the full exemption will continue only for eligible EVs under $75,000. Eligible EVs above $75,000 (but below the threshold) will get a 25% FBT discount instead.
  • From 1 April 2029: all eligible EVs move to the 25% FBT discount.
  • Existing leases: arrangements already in place are expected to keep their current treatment.

These changes have been announced and released as draft legislation. We will update this page as the rules are finalised.

Lease before April 2027 to lock in the full exemption

If you are thinking about an EV priced above $75,000, a novated lease started before 1 April 2027 is expected to keep the full FBT exemption for the life of the lease. EVs under $75,000 keep the full exemption until 1 April 2029.

Which electric cars can I get?

Through the Alan Mance Motors group we can source eligible EVs from brands including XPENG, Kia, Hyundai, Geely and GWM, as well as most other brands. See our electric and hybrid cars to lease, try the novated lease calculator, or read how novated leasing works.

Frequently asked questions

Is an electric car on a novated lease really FBT free?

Yes, if it is an eligible battery electric or hydrogen car priced below the luxury car tax threshold for fuel-efficient vehicles ($91,661 for 2026-27). From 1 April 2027 the full exemption is planned to apply only to eligible cars under $75,000.

Do I have to pay anything after tax?

Usually no. Because eligible EVs are FBT exempt, the whole lease can normally be paid from your pre-tax salary.

Will an EV novated lease affect my income statement?

The exempt benefit still appears as a reportable fringe benefit on your income statement, which can affect things like the Medicare levy surcharge, child support and some government payments.

Can I include home charging?

Yes. Charging costs can be included in your lease. The ATO has a set rate per kilometre for home charging that makes this simple.

What about plug-in hybrids?

New novated leases on plug-in hybrids made from 1 April 2025 no longer qualify for the exemption, so a fully electric car usually gives a bigger saving.

This is general information only and does not take your circumstances into account. Tax rules can change, so please speak to your accountant or tax adviser before making a decision.

Talk to PAR Leasing

Call us on (03) 8387 1200, email davidb@parleasing.com.au or send us a message for a free, no-obligation quote. PAR Leasing is the fleet division of Alan Mance Motors, based at 237-241 Geelong Road, Footscray, and works with organisations across Victoria and the east coast of Australia.