Every year, retail automotive Dealers collect billions of dollars on behalf of state governments, a fact not highlighted enough by us and thus under-appreciated by governments.
The industry collects stamp duty in the order of $6 billion annually for state governments, behind only the real estate industry.
In Victoria alone, motor vehicle taxes are expected to amount to $10.6 billion over 2014-18, with annual vehicle registration fees kicking in another $1.6 billion per year. Duties on registrations and transfers will add up to $3.8 billion over the four-year period.
New car sales contribute around $1 billion per year in stamp duty. When you add the stamp duty on used cars the economic impact rises significantly. Total vehicle stamp duty in 2015/16 was $2.7 billion.
To put it another way, the average Holden Dealer sold 362 new vehicles in 2017. If the average price was $40,000, the average stamp duty per sale was $1,200. That means the average Holden Dealer collected around $435,000 in stamp duty last year on new cars alone. Then there are used cars, which also attract stamp duty and, of course, Dealers have to pay stamp duty on imported vehicles.
These numbers highlight how important Dealers are to the revenue base of state governments. On top of the sheer dollar value there is also the work that goes into calculating, reporting and transferring the money into state coffers.
The Victorian Government used the end of local car manufacturing as a reason to increase stamp duty on new cars, removing a discount that was meant to encourage buyers to support local manufacturers.
The massive, crucial contribution Dealers make to state economies should put the industry in a strong position when it comes to negotiating with governments and regulators.
Exemptions for electric
Hyundai last year called for the lowering of stamp duty to encourage the take-up of electric vehicles. The South Australian Government has promised that – if it retains power in the state election later this year – it will scrap stamp duty charges and offer free registration for the first five years for new electric car customers.
The proposed policy as announced by South Australia’s Minister for Sustainability, Environment and Conservation, Ian Hunter, is the latest in a strategy to make Adelaide the world’s first carbon neutral city and de-carbonise the state’s transport system.
Stamp duty by state
New South Wales
Stamp duty is based on either the market value of the car, or the price paid, whichever is greater.
$44,999 or less – 3 percent
$45,000 or more – $1350 plus $5 per $100.
Rates are based on type of engine.
Hybrid and electric vehicles – 2 percent
1 to 4 cyl, 2 rotors or a steam vehicle – 3 percent
5 to 6 cylinders, 3 rotors – 3.5 percent
7 or more cylinders – 4 percent
Private sale rates are based on the price of the car.
Up to $1000 – 1 percent ($1 per $100), with a minimum payment of $5.
$1001 – $2000 – $10 plus 2 percent ($2 per $100) for every dollar over $1000
$2001 – $3000 – $30 plus 3 percent ($3 per $100) for every dollar over $2000
More than $3001 – $60 plus 4 percent ($4 per $100) for every dollar over $3000.
Commercial vehicles attract the same rates, up to $2000. For vehicles worth more than $2000, it is $30 plus 3 percent for every dollar over $2000.
Based on market value.
Up to $600 – $20 flat rate.
$600 – $34,999 – 3 percent.
$35,000 – $39,999 – $1050 plus 11 percent ($11 per $100) for every dollar over $35,000.
$45,000 and over – 4 percent ($4 per $100)
Different rates for new or used vehicles. Based on the higher of market value or sale price.
Up to $61,884 – 3.2 percent
Over $61,885 – 5.7 percent
Non-passenger new vehicles – 2.7 percent
Used cars attract a rate of 4.2 percent.
Based on ‘dutiable value’: the manufacturers’ list price (new vehicles) or reasonable market value (used cars).
Up to $25,000 – 2.75 percent.
$25,001 – $50,000 – 2.75 percent plus an additional rate calculated on the price of the car above $25,000.
Over $50,000 – 6.5 percent
Australian Capital Territory
Based on a combination of price and how the vehicle is rated by the Green Vehicle Guide (four categories: A to D, with A being the ‘greenest’ and D the least ‘green’).
Up to $45,000 value
Class A – 0
Class B – 2 percent
Class C – 3 percent
Class D – 4 percent
Class A – 0
Class B – $900 plus 4 percent for every dollar over $45,000
Class C – $1350 plus 5 percent for every dollar over $45,000
Class D – $1800 plus 6 percent for every dollar over $45,000
3 percent of the dutiable value.