The EV FBT wind-back: what to do before 1 April 2027

The full EV FBT exemption has been one of the most valuable tax planning tools available to employers since 2022. It's not disappearing, but it's narrowing.

Here's the new shape. From 1 April 2027 to 31 March 2029, the full FBT exemption only applies to EVs priced at $75,000 or under. EVs above $75,000 but under the Luxury Car Tax threshold for fuel-efficient vehicles get a 25% FBT discount. From 1 April 2029, all EVs under the LCT threshold get only the 25% discount, with the full exemption gone entirely.

Critically, leases entered into before 1 April 2027 are protected for their full term, provided the binding commitment is in place. This is the same grandfathering approach that worked for PHEVs.

What this means in practice:

• If you've been considering an EV salary package or fleet refresh, the next 11 months matter
• Vehicles between $75,000 and around $91,000 lose the most under the new rules
• Sub-$75,000 EVs keep the full exemption for another 2 years, then drop to the 25% discount
• Existing arrangements need their binding commitment paperwork in order

Don't rush a bad decision, but if you were already moving toward EVs, the timing case is strong.