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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
EV FBT Exemption Changes from April 2027

EV FBT Exemption Changes from April 2027

What is changing with the electric car FBT exemption?

Since July 2022, eligible electric cars provided to employees have been exempt from fringe benefits tax (FBT). This has made electric company cars and electric novated leases much cheaper. Following a Treasury review, the Government announced in May 2026 that the exemption will be phased down.

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.

What it means for employers

If you provide company cars, now is a good time to review your fleet. Eligible EVs leased before 1 April 2027 are expected to keep the full exemption for the life of the lease. After that date, cars under $75,000 still get the full exemption, so lower priced EVs remain a strong choice.

What it means for employees with a novated lease

Employees can still save with a novated lease on an eligible EV after April 2027, but the savings on dearer models will be smaller. Many of the most popular EVs are priced under $75,000 and will keep the full exemption until 1 April 2029.

What you should do now

  • Check which of your vehicles are due for replacement before April 2027.
  • Ask us for a quote on eligible EVs so you can compare costs.
  • Allow time for delivery, as some models have waiting lists.
  • Speak to your accountant about your organisation’s FBT position.

Frequently asked questions

When does the EV FBT exemption change?

The Government has announced changes from 1 April 2027. The full exemption will then apply only to eligible EVs under $75,000, with a 25% discount for eligible EVs above $75,000. From 1 April 2029 all eligible EVs move to the 25% discount.

Will my existing EV lease be affected?

Arrangements already in place are expected to keep their current treatment, so an existing eligible EV lease should keep the full exemption.

Is the change law yet?

Not yet. The changes have been announced and released as draft legislation. We will update this page when the rules are final.

Should I lease an EV before April 2027?

If you are planning to replace a vehicle, leasing an eligible EV before 1 April 2027 can lock in the full exemption. Speak to us for a quote and to your accountant about your situation.

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.