The Car Tax That Should’ve Died With Holden

Added: 2026-05-31

[00:00:00]Something more Australian than Ford and Holden, and that's is tax. We're talking about a a tax that was introduced and maybe at the time it kind of made sense, but today it's still here and frankly it's ridiculous. Now, what tax am I referring to? We are talking about the luxury car tax here in Australia, down under. It was introduced back in the time where you could go buy a brand new Commodore or a Falcon built right here in this country. Back when Australia built their own cars and and luxury car meant something totally different than it does today. But now in 2026, Holden is gone, Ford is gone, Toyota is gone, everyone's gone. So, today I want to explain what the luxury car tax is, why it kind of made sense when it was introduced, how it works with today's car, and it's just frankly ridiculous and outdated. What even is a luxury car tax? Well, let's start simple. On July 1st, 2000, it was introduced alongside GST. The government back then scrapped a ton of taxes. It's important to make this clear. This is not instead of GST, this is on top of GST as well. As of right now, as I'm filming this video, I've got it right in front of me, the threshold for this luxury car tax is $80,500, and there is a higher threshold for ultra fuel-efficient vehicles at 91,000.

[00:01:17]But what this does is this kind of takes away the meaning of the luxury car tax and is just taxing any car that is expensive. Here's why it actually kind of made sense in 2000 because the car market was completely different than it is today. When it was introduced, the tax threshold was at $57,000, so about 110,000 in today's money. Because back then, $105,000 was genuinely a luxury car. I mean, we're talking E-Class Mercedes, BMW 5 Series, you know, entry-level Porsche. So, yeah, I think generally these are the cars that Aussies would view as expensive. And I mean, here is a a VT Commodore from the same year, a base model is about $30,000, you know, high 20s, low 30s, around that. Um and AU XR6, low to mid 30s. So, the luxury car tax actually made sense because it was protecting our local Australian industry and and not just Holden and Ford, you know, all of the onflow effect that that would have, the the local distribution centers, the jobs. Uh people could at least understand why the government has taken these steps. But because I guess Holden, Ford, and Toyota were still building cars here, the argument was, if you wanted an expensive imported car, you know, fine, but you're just going to pay a little bit more for it. But then, as you know, everything changed. In 2016, Ford stopped producing our beloved Ford Falcon and Holden stopped producing in October 2017 our beloved Commodore. And suddenly, overnight, what is the point of the luxury car tax because the industry that it was supposed to protect is now dead.

[00:02:49]There was also a completely different car market in 2017. I mean, people had kind of stepped away from those luxury European sedans a little bit and were, you know, driving crossovers and SUVs. Because of everybody moving into Patrols and Land Cruisers and dual cab utes, the problem is these cars are also creeping up to that price.

[00:03:09]But here's the problem. In today, in 2026, it's ridiculous. Not only are we almost a decade on from Holden closing doors, the threshold is only at $80,000. And I know that only like it is a lot of money, but if you have a look at what a brand new car costs today, what it was 10 years ago or even 20 years ago is not what you're thinking. I mean, $80,000 doesn't get you what it used to get you. I mean, a Corolla is $40,000. We're we're talking normal family cars for this money, which is, you know, that's a whole 'nother debate entirely. I actually filmed a video recently of a Yukon Denali and basically what I said is this car was over $208,000, but almost a quarter of it, $57,000, over quarter, was tax, GST, and luxury car tax. And that's important to remember, GST still applies in this case. So, everyday punter is is now the bloke getting hit with it because they haven't aligned this tax with inflation.

[00:04:08]The working man, the working family, um on top of everything else that's going on, which is a whole another discussion. I'm not getting into that, but what is going on here? I mean, fair enough. Look, if you're paying $500,000 for a car, okay, maybe this car, but I mean, this is targeting the average Aussie family, and I just I just hate this stuff. And like anything the Australian government does, there is a loophole here. Now, commercial vehicles, this tax does not apply to. So, a lot of cars like the Silverados or the RAMs, this doesn't apply to.

[00:04:41]Um and so, basically, the other, you know, cars in the range of, well, GM, especially, have like another 50 grand on top of them that just goes to the government's pocket.

[00:04:52]And it also means that the pricing on on the market of the cars around this price is all over the joint.

[00:05:00]And people paying a quarter of a million dollars on a brand new American ute are completely avoiding of this tax, but somebody that is buying a brand new electric car for their family for 95 is going to be hit with it. So, the bit that bugs me the most about this is Holden was building, and Ford as well, some fantastic cars at the end of their tether. They were Honestly, the W1s, the GTSs, the Maloos, and the FGXs and stuff, they were fantastic, world-class cars. Really, that they were, and they hold up extremely well even today. But, I think the only reason that this hasn't copped more public backlash is people just don't know about it, and it's just it's just like it's just so arbitrary, and I don't I don't get why, you know, a a brand new Hyundai or something that someone's buying for their family, an Ionic or whatever, might get hit. Or maybe not that cuz it's an electric car, but you know, you know what I mean. And a brand-new Silverado isn't going to get hit with it, so I can understand why it was introduced back in the day, but today it's just ridiculous. We're in a completely different world than we were just 25 years ago. This is a tax for an Australian that is not alive anymore. It is long dead. So, let me know what you guys think in the comments below. I can kind of gather your I I think I know what you're going to say anyway. I feel like I hopefully a lot of people agree with me here, but it's just it's ridiculous. It should be scrapped completely because what is it even protecting? Maybe if they if they use those funds to protect other industries of of Australian manufacturing, then I think people could get on board, but we all know that's not going to happen. I mean, it's just going to go to spending $95 million on a government website. So, anyway, I thank you guys for following along and watching and subscribing. Um I like doing these videos occasionally every now and then just going to get something off my chest. Let me know what you guys think about it.