FY18-19 sees the figure raised by $1237

The Federal Government has increased the Luxury Car Tax (LCT) threshold for the 2018-19 Financial Year, bumping it to $66,331.

An increase of $1237 on the 2017-18 value, the $66,331 threshold applies to vehicles that use more than 7.0L/100km on the combined cycle.

Vehicles categorised as 'fuel efficient' – that use less than 7.0L/100km – continue to have the 33 per cent levy over the threshold charged from $75.526, a value that has remained stagnant for the past two years and has barely risen in the last 10.

The increase in threshold means that the average saving on current vehicles to which the tax is applied is around $370, should the manufacturer choose to pass that on.

While the change brings a welcome, if nominal discount for consumers, car brands are still not happy that the tax continues to be in place.

"It is disappointing that yet again the Fuel Efficient threshold of the LCT has not moved," said David McCarthy, senior manager for public relations and product communications at Mercedes-Benz Australia.

"The fuel efficient threshold has played a vital role in changing buyer behaviour into more fuel efficient (and lower emission) vehicles and whilst it still plays a valuable role the lack of movement in the threshold demonstrates the need for the LCT to be abolished."

"The LCT is a discriminatory and illogical tax on technology and safety and it is nothing less than a false tariff," he added.

Lexus Australia has already announced revised pricing in line with the FY18-19 LCT changes, with savings ranging from $2 to $371 across various models that sit above the threshold.

Do you think the Luxury Car Tax is fair?