Does the FBT exemption for EVs still apply?

 Author: JayATO(Community Support)Community Support

9 Apr 2026

Hi @FreddyKruger,

The FBT exemption for electric vehicles will depend on the type of vehicle in your novated lease. For a battery electric vehicle registered between 1 April 2026 and 31 March 2027, the FBT exemption continues to apply as long as the vehicle meets the requirements of the electric car exemption.

However, if you're asking about a plug-in hybrid electric vehicle, the situation is different. From 1 April 2025, plug-in hybrid electric vehicles are no longer considered zero or low emissions vehicles under FBT law and aren't eligible for the electric car exemption. The exemption only continues for PHEVs if both of these conditions are met:

• the PHEV was used or available for use before 1 April 2025 (and that use was exempt)
• there's a financially binding commitment to continue providing the vehicle for private use on and after 1 April 2025.

This means a new novated lease for a PHEV starting in the 2026-27 FBT year won't be eligible for the exemption. The exemption also won't apply after 31 March 2027, even if an option is taken to extend a pre-existing PHEV lease beyond that date, because any optional extension isn't considered a binding commitment.

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