Why an EV is the strongest novated lease
On an eligible electric vehicle the Fringe Benefits Tax that normally applies to a car benefit is removed, so far more of the cost comes out of your pre-tax salary. Combined with no GST on the car (up to the $6,353 cap) and GST-free running costs, the saving is substantial.
How the $91,661 threshold works
The exemption applies to battery electric vehicles with a drive-away price under the fuel-efficient luxury car tax threshold, which is $91,661 for the 2026-27 financial year. The threshold is indexed each year. Plug-in hybrids stopped qualifying for the exemption for new arrangements from 1 April 2025.
- Battery electric vehicles under $91,661: FBT exempt
- Plug-in hybrids: no longer exempt for new leases
- Petrol, diesel and conventional hybrids: not exempt, but still save via pre-tax running costs and GST
Electric cars you can novated lease
Common questions
Which electric cars are FBT exempt?
Battery electric vehicles with a drive-away price under $91,661 for the 2026-27 financial year. Most mainstream EVs qualify.
Are plug-in hybrids FBT exempt?
Not for new arrangements. The plug-in hybrid exemption ended on 1 April 2025. Only battery electric vehicles qualify going forward.
How much can I save on an EV novated lease?
It depends on your salary and the car, but the exemption plus GST savings make it the biggest saver. Run your car on the CarBon calculator to see your real figures.