Dealers after a fair cut
CANBERRA is being lobbied to level the playing field for secondhand car sellers in Australia. They want parity with private sellers who, without having to pay the 10 per cent GST, can often sell an identical car for thousands of dollars less than a commercial operator and without having to provide any warranty backup.
Their case is being argued by the Motor Trade Association of Australia, which has petitioned the Federal Government ahead of the budget in May.
It is also calling for the Luxury Car Tax (LCT) to be abolished because too many
normal’’ family cars are now being caught in the net.
A used car bought privately, from a private seller’s driveway, is not subject to GST but an identical car bought from a dealer does attract GST. It’s inequitable,’’ MTAA chief executive Richard Dudley says.
Private sellers do not have to provide the same level of consumer protection as licensed dealers nor face the extra impact of the GST.
Dudley says a three-year-old Holden Commodore, for example, might be valued at $20,000, but a dealer had to cost it at $22,000 because of the extra 10 per cent in GST.
Some dealers have tried to absorb part of the GST costs to compete with private sellers but it has hit their business.
The dealer loses oneeleventh of the selling price to GST to the government,’’ one dealer told Carsguide.
Dudley says the MTAA is not a tax expert and does not know how things will be resolved, adding: The simplest solution would be not to apply GST to car sales at dealers.’’
The MTAA is also arguing for the abolition of the federal government’s LCT, as are the major car brands. The LCT is a 33 per cent tax that applies to the value of a car costing more than $57,466 or, for fuelefficient cars bettering 7 litres/ 100km, more than $75,375.
A family with six kids that needs a Tarago or someone who buys a Subaru Liberty Outback doesn’t have to pick many options to find themselves above the luxury car tax threshold,’’ Dudley says. There is no luxury tax on other items like a 40-foot yacht or a $40,000 wristwatch. If they can’t abolish the LCT then at least lift it to a reasonable figure.’’
Sliced: Luxury Car Tax and GST hit dealers