Deal­ers af­ter a fair cut

Herald Sun - Motoring - - Car News - STU­ART INNES in­ness@cars­

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

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