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mastervivi(Newbie)Newbie
4 Aug 2024

As per ATO website,

From 1 April 2025, a plug-in hybrid electric vehicle will not be considered a zero or low emissions vehicle under FBT law. However, you can continue to apply the exemption if both the following requirements are met:

  1. Use of the plug-in hybrid electric vehicle was exempt before 1 April 2025.
  2. You have a financially binding commitment to continue providing private use of the vehicle on and after 1 April 2025. For this purpose, any optional extension of the agreement is not considered binding.


My question is if my PHEV vehicle will be eligible for FBT exemption with the provided facts:

  • I want to sign a novated lease contract with my employer's novated lease provider to start purchasing a new PHEV vehicle for private use in November 2024 (~4-5 months before 1 April 2025 due date)
  • However, due to some unexpected delays such as manufacturer or shipping delays, the car may be delivered to me later than 31 Mar 2025 e.g. May 2025.
  • It means I may start driving my PHEV vehicles after the due date 31 Mar 2025, but my signed contract with the novated lease provider was in Nov 2024 (~4-5 months before 31 Mar 2025), it means financially binding commitment was agreed and signed before due date 1 April 2025.


In that case, can I still apply FBT exemption for my PHEV vehicle with the provided scenario above?


Thank you so much for your advice.

1,900 views
8 replies
1,900 views
8 replies

Most helpful response

Most helpful reply

Matt_ATO(Community Support)Community Support
6 Aug 2024

Howdy @mastervivi,


You signed a novated lease contract in November 2024, which is before the 1 April 2025 deadline. This meets the financially binding commitment before the due date.


The key factor is whether the vehicle use was exempt before 1 April 2025. If the vehicle is delivered after 31 March 2025, it might complicate this requirement since the exemption is tied to the actual use of the vehicle.


If Delivered Before 1 April 2025:

  • If the vehicle is delivered and you start using it before 1 April 2025. You should be eligible for the FBT exemption as both conditions are met.


If Delivered After 1 April 2025:

  • If the vehicle is delivered after 31 March 2025. The exemption might not apply because the vehicle use was not exempt before the due date, despite having a financially binding commitment.


All replies

Most helpful reply

Matt_ATO(Community Support)Community Support
6 Aug 2024

Howdy @mastervivi,


You signed a novated lease contract in November 2024, which is before the 1 April 2025 deadline. This meets the financially binding commitment before the due date.


The key factor is whether the vehicle use was exempt before 1 April 2025. If the vehicle is delivered after 31 March 2025, it might complicate this requirement since the exemption is tied to the actual use of the vehicle.


If Delivered Before 1 April 2025:

  • If the vehicle is delivered and you start using it before 1 April 2025. You should be eligible for the FBT exemption as both conditions are met.


If Delivered After 1 April 2025:

  • If the vehicle is delivered after 31 March 2025. The exemption might not apply because the vehicle use was not exempt before the due date, despite having a financially binding commitment.


Scratch2k(I'm new)I'm new
12 Nov 2024

There's many thousands of dollars riding on this answer for many people, and "might" isn't enough of an answer from the ATO. If I enter into a binding lease for 5 years expecting to have the FBT exemption, and it "might" not apply, that's 5 years of a lot of extra expense which "will" cause a financial problem.


Either the vehicle is excempt after March 2025 or it's not, which one is it?


There's another thread on here which is equally unhelpful, one answers says yes, the other says no. Which one is it?


https://community.ato.gov.au/s/question/a0JRF000002IAXd2AO/p00334089?referrer=a0N9s000000Dac8EAC


Chris_927(Newbie)Newbie
19 Mar 2025

Hi ATO, Will the vehicle still meet the test of being "available for use" if it is under a temporary moving permit? But registered after 31 March.


I/e I live in WA and purchase a PHEV from SA under a novated lease. The car is fully paid for and I fly to Adelaide on 29/03 to pick it up and drive back with a temporary moving permit. I then need to get it inspected and registered in WA but that occurs after 31 March.


In this case I have satisfied the binding commitment as i've paid for the vehicle and novated lease in place; and

It was available for use prior to 31 March as I used it to drive back from Adelaide before having it registered.

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Is PHEV car exempt from FBT if novated lease is signed in 2024 but car is delivered after Mar 2025. | ATO Community