The Australian government has confirmed it will extend the fringe benefits tax (FBT) discount for novated leases of electric vehicles until April 2027, a key measure to encourage EV adoption. The announcement comes as interest in EVs and home electrification rises due to the global energy shock driven by geopolitical tensions.
Details of the FBT Discount Extension
Under the program, employees can obtain an eligible EV through a novated lease, paying with pre-tax income and reducing their income tax. The Albanese government extended the discount after a Productivity Commission review recommended scrapping it due to higher-than-expected costs. The extension includes three phases:
- Phase 1 (until April 2027): Full FBT exemption for eligible EVs.
- Phase 2 (April 2027 to April 2029): FBT discount applies only to EVs under $75,000, with a 25% discount for EVs between $75,000 and the luxury car tax threshold ($91,387).
- Phase 3 (from April 2029): A 25% FBT discount for all EVs below the luxury car tax threshold.
Kristen McDonald, director at Rewiring Australia, supports the extension, stating that incentives should remain until the market matures and more EVs enter the secondhand market. She notes that only 2% of Australia's car fleet is electric.
State-Level EV Incentives
While direct subsidies have been phased out in most states, some incentives remain:
- Queensland: Small discounts on stamp duty and registration.
- New South Wales: Concessions on motor vehicle tax and registration discounts for EVs and low-emission hybrids.
- Northern Territory: $1,500 stamp duty discount for new or used battery-electric, fuel-cell, and plug-in hybrids until July 2027, plus free registration.
- Western Australia: $15 million grants scheme for EV charging infrastructure for small businesses, not-for-profits, and local governments.
McDonald shares that she saves money by charging her EV overnight using a standard wall socket and a retail plan with low overnight rates.
Support for Solar Panels and Home Batteries
The federal government's Small-scale Renewable Energy Scheme (SRES) provides discounts on rooftop solar systems through Small-scale Technology Certificates (STCs). Installers pass on the discount to customers. Additional state-based incentives exist, such as Victoria's rebate of up to $1,400 plus interest-free loans. Feed-in tariffs vary by state, with solar owners typically receiving lower rates than retail electricity prices.
For home batteries, the SRES offers STCs for eligible systems, with discounts declining every six months and tiered based on battery size (tapering after 14 kWh). Some states offer virtual power plant programs that provide higher feed-in tariffs and other benefits.
Australians can use the federal government's online tools to check available assistance for individuals and businesses.
