30 Sep 2026

The novated lease electric vehicle FBT exemption changes: what happens from 1 April 2027

If you’ve been considering taking advantage of the government’s electric vehicle Fringe Benefits Tax (FBT) exemption – particularly if you’ve been eyeing off a car worth more than $75,000 – you should act now. While the electric car FBT exemption isn't disappearing on 1 April 2027, it is narrowing. 

Key changes at a glance

• What's changing: From 1 April 2027, the full FBT exemption only applies to EVs priced at $75,000 or less. EVs priced above $75,000 (up to the luxury car tax threshold) don't lose the exemption entirely, but move to a 25% discount on payable FBT.
• What to do: If you want an EV priced between $75,000 and $91,661 delivered before 1 April 2027 to lock in the full exemption, you should consider ordering your vehicle now since the exemption is based on the date you get your car, and delivery can take up to six months.

See how much you could save with our novated lease calculator 

The EV FBT exemption is changing, not ending

If you've already read our explainer on how the EV FBT exemption works, you'll know the basics: under a novated lease eligible electric vehicles  can currently be fully exempt from Fringe Benefits Tax, letting you pay for the car and its running costs entirely from your pre-tax salary. 

That full exemption isn't going away completely. What's changing is which cars are eligible for it. From 1 April 2027, the Government is introducing a lower price cap for the 100% exemption, alongside a partial concession for pricier EVs. From that date, there will be two thresholds that matter: a $75,000 cap for the full exemption, and the fuel-efficient luxury car tax (LCT) threshold, which sits at $91,661 for the 2026-27 financial year and is indexed annually by the Australian Taxation Office (ATO).

What changes on 1 April 2027

From that date, the new structure looks like this:

• EVs priced at $75,000 or less: full FBT exemption continues unchanged.
• EVs priced above $75,000 but below the fuel-efficient LCT threshold: a 25% discount on FBT otherwise payable, rather than a full exemption.
• EVs priced at or above the LCT threshold: no concession (as is the case now).

This applies to battery electric vehicles that meet the existing eligibility rules. None of the changes have any impact on how the novated lease itself works; it's only the FBT treatment above $75,000 that shifts.

A note on 2029

There's a second date worth keeping in mind. From 1 April 2029, the 25% discount will become the standard treatment for all eligible EVs under the Luxury Car Tax threshold, replacing the full exemption entirely, even for cars that are priced under $75,000 today. 

What the $75,000 cap means for your lease

It’s important to note that your exemption  isn't locked in when you sign your lease agreement. It's determined by when the car is first held and used, which in practice means the delivery date. 

If you sign a lease agreement in February 2027 but the car isn't delivered until May 2027, that vehicle falls under the new rules, not the old ones. A lease agreement signed before 1 April 2027 doesn't, by itself, guarantee the full exemption if delivery occurs after that date.

Why your delivery date is the date that counts

It’s important to note that your exemption  isn't locked in when you sign your lease agreement. It's determined by when the car is first held and used, which in practice means the delivery date. 

If you sign a lease agreement in February 2027 but the car isn't delivered until May 2027, that vehicle falls under the new rules, not the old ones. A lease agreement signed before 1 April 2027 doesn't, by itself, guarantee the full exemption if delivery occurs after that date.

Delivery can take up to six months

This is where acting right now becomes a real consideration rather than a bit of marketing talk. Some popular EV models can currently take up to six months from order to delivery, and that lead time tends to lengthen for in-demand models as we get closer to a deadline like this one. 

If you want an EV priced between $75,000 and the LCT threshold delivered before 1 April 2027 to lock in the full exemption, it could be worth looking at ordering well before the end of 2026 for many models. Waiting until early 2027 to start the process could significantly narrow your options.

When was this announced?

The $75,000 cap, the 25% discount band, and the 2027 and 2029 dates were announced as part of the 2026-27 Federal Budget and are outlined on the ATO's electric car discount page.

Choosing a vehicle under the $75,000 cap

If you’re looking at an eligible EV under $75,000, you have until 1 April 2029 to have your novated lease car delivered while still receiving the full 100% FBT exemption. That’s great news, particularly given how many more make and model choices sit in this price bracket compared to a few years ago. 

You can use our obligation-free novated lease calculator to see what's available right now.

What to do now

 If you're weighing up getting an EV in the $75,000 to $91,661 range through a novated lease, it could be worth considering starting the process now, including: 

• Setting your budget
• Shortlisting models, factoring in both price and how in-demand they currently are
• Checking the delivery estimate for your shortlisted models
• Talking to FleetPartners and starting the lease process early if you want delivery to occur before 1 April 2027.

If you're considering an EV with a novated lease and want to understand your options under the current rules, or check delivery timeframes for a specific model, get in touch with the FleetPartners novated leasing team today. We’ll talk you through what a full exemption and a 25% discount would each mean for your take-home pay, based on the vehicle and lease term you're considering, and help you start the process as quickly as possible.

Contact us

This article is general in nature and doesn't take into account your personal financial situation. For advice specific to your circumstances, speak with your tax or financial adviser. 

Important information: Information is general in nature and does not constitute financial or other professional advice, which you should obtain. It has been prepared without taking into account your objectives, financial situation or needs. Any references to government announcements, reviews or proposed changes are based on information available at the date of publication and may change (including through the legislative process). Outcomes may differ depending on the final law and any guidance issued by relevant authorities. All applications for credit are subject to credit approval criteria. Terms and conditions, fees and charges apply.