Planning an EV lease? Understand the announced 2027 discount changes

22 October 2026

The Australian Government’s 5 May 2026 announcement sets out a staged change to fringe benefits tax treatment for eligible electric vehicles. It says the existing Electric Car Discount continues in full through March 2027 and that existing leases will not be affected by the announced changes.

For the next phase, starting 1 April 2027, the announcement describes a full exemption for eligible EVs costing $75,000 or less. Vehicles above that amount but below the relevant luxury car tax threshold are described as receiving a 25% discount on payable FBT. From 1 April 2029, the announcement describes a 25% FBT discount for eligible vehicles below the threshold.

This is a description of the announcement, not confirmation that a particular car or employment arrangement qualifies. A 25% FBT discount is not a 25% reduction in the purchase price.

Before signing a lease, ask the provider or tax adviser to explain current eligibility, commencement provisions, vehicle pricing definitions and the full costs in your circumstances. Compare the complete arrangement, including charging and maintenance, rather than making a decision from a tax headline alone.