Goods and Services Tax (GST) & Depreciation – Car Purchases 2026–27

For 2026–27, GST credits and depreciation on motor vehicles are limited by the ATO car limit rules.

GST credits
If a vehicle is purchased above the car limit, the maximum GST credit is capped at 1/11 of the car limit. For 2026–27, this equals $6,353 (1/11 × $69,883).

Even if the car costs more, the GST claim cannot exceed this cap (unless specific exceptions apply).

GST credits must be claimed through your BAS within 4 years. Late claims are generally not accepted.

Depreciation
Depreciation is also capped at the ATO car limit of $69,883 for 2026–27.

If the vehicle costs more than this, depreciation is only calculated on the capped amount, not the full purchase price.

Luxury Car Tax (LCT)
LCT is not claimable as a GST credit, even if the vehicle is used for business purposes.

Gain Ma and Co helps with GST compliance, BAS lodgements, vehicle structuring, and depreciation planning to ensure correct tax treatment and maximise allowable deductions.