Federal Government to impose capital gains tax on used car sales – UPDATE

UPDATE, 12:00pm, 01/04/22: Well done to our readers on seeing through this April Fool's Day joke. The original story can be found below.

As a follow-up to this week's 2022 Federal Budget, the Government has today announced the application of a capital gains tax on second-hand car sales.

The 'LandCruiser Levy' will apply to all vehicles sold at a price above their agreed value, based on conditions of the market prior to 1 April 2020. This removes any inflated pricing the second-hand car market has endured over the past 24-months.

Automotive assets sold for a profit will be subject to the same business rate calculation of tax on the gain as cryptocurrency and share assets. For example, this would see a 19 per cent capital gain tax imposed on a car sold for between $18,200 and $45,000 above its agreed pre-period value.

Motor vehicles have been previously exempt from capital gains tax but Tony Gouger from the Fringe Offset Opportunity Liasion department of the Federal Treasury noted "the responsibility of the Government is to identify every opportunity where Australians are able to turn a profit and clip the ticket on the way through."

An example scenario noted a 2007 Toyota LandCruiser 79 Series ute (new price of $56,490) which has a pre-1 April 2020 price estimation of $27,400 being sold in the current market for $186,450.

This represents a $159,050 capital gain, which is taxed at a rate of 37 per cent. The seller would need to then pay $58,848.50 in tax, but still pocket the remaining $100,000 profit for themselves.

The new tax is expected to yield some $4.2 billion extra taxation revenue and will be implemented effective from 1 April.

A press conference is expected to be held at midday today, with further details.