Should Luxury Car Tax be charged on a Volkswagen Camper?

QUESTION

Hello John,

I'm a long-time fan of the YouTube channel and I'm finally reaching out as I'm staring down the barrel of purchasing a brand new Volkswagen California T6.1 Campervan - I would have reached out sooner but in this case, VW Australia had a limited run of 30 units available to pre-order exclusively online of which I participated in.

The question I had for you was specifically in relation to the Luxury Car Tax component which my local dealer has listed on my contract of sale.

I'm no stranger to LCT, stamp duties and the like but I have raised the question with my dealer who states LCT is in fact on their pricing sheet for the van.

I'm certainly no expert on the subject, but the ATO very clearly state:

"LCT doesn't apply: to a motor home or campervan, or a commercial vehicle designed mainly for carrying goods and not passengers".

Then, looking at VW Australia's own PR on the launch of the California (link here: https://www.volkswagen.com.au/en/brand-experience/volkswagen-newsroom/california-beach-camper-van-multivan-cruise.html) they state:

"While the late 2020 arrival of Volkswagen’s updated range of vans and people movers has many customers excited for the introduction of the 6.1’s new EU6-compliant engines and raft of standard safety and infotainment, the announcement of the return of the iconic Camper Van as part of the range has certainly captured the public’s imagination.

As Australians can begin to once again plan weekends away exploring their own backyard, customers have a chance to own the very first new generation Camper, the California Beach, as a highly specified Limited Edition via online purchase on the Volkswagen Australia website."

As I (and I imagine anyone would) read the above, VW Australia clearly claim the California to be a "Camper Van". If I add A + B together, one could reasonable ask then why is LCT applicable on this sale at all? Unless I am missing something entirely.

I would really appreciate any feedback or advise on how to approach this further with my dealer or VW Australia directly.

Basically the (rounded) figures look like this:
Vehicle price: $93,000
Accessories: $14,000
LCT: $12,000
Delivery fee: $1000

Subtotal: $120,000
+ Stamp Duty: $3300
+ Registration and statutory insurance: $900
Total retail price: $124,200

FYI, I'm okay and was expecting something to the tune of the above so its not exactly bill shock, however the above questions I had to raise and thought you could shed some light upon.

Faithful follower,

Ben

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ANSWER

Hey Ben,

If I were you I’d call the ATO or conscript your accountant to investigate this. Even if it costs you $1000 to save $12k potentially, it’s probably worth it.

Volkswagen head office might be able to shed some light on this as well. (It’s good to double-check that the dealer is not just ripping you off.)

There’s probably a definition of what exactly constitutes a vehicle that qualifies for exemption from LCT - but I don’t know what that is, off the top of my head.

However, the price you’re paying seems in line with Volkswagen’s recommended drive-away price, so perhaps it does not qualify for LCT exemption. (This is probably not the kind of thing even they would get wrong.)

Thanks for the kind words and your interest in my reports mate - let me know how you go - as it might be worth a report if you get away with it.

JC

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