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The only bad thing about the government’s instant asset tax write off policy on new company cars - which offered a $150,000 tax break to help people buy a new vehicle - was that it was asking people to spend money to save money when, quite possibly, they didn’t have any money to spare.
While it sounded like the offer of a lifetime, it came at a time when many livelihoods were doing it tougher than ever, and with a ticking clock attached, as the $150,000 write-off was set to drop back to just $1000 on July 1 this year. Fortunately, the government has now announced a six-month extension of the policy, taking it through to December 31, 2020.
That means that, happily, small-business owners have more time to find, or make, the cash they need to buy a new vehicle, and that some desirable cars that weren’t yet on the market will now be available to purchase under the scheme.
And, most appropriately as we’re talking about cars that people use for work, at the top of that list come three hugely desirable and long-awaited new utes - Mazda’s BT-50, Isuzu’s D-Max, and a new version of one of Australia’s most popular vehicles, the Toyota HiLux.
Firstly, though, we should look at what the tax write-off is, and what’s happened to it. Earlier this year, as the virus crisis hit, the federal government announced that it would lift the threshold amount for claimable purchases to $150,000 from the previous $30,000.
You don’t have to buy a car for your business with the money, of course, you could get a very nice forklift, but a lot of people will use it for a vehicle. You do have to be a business, but even small businesses, including sole traders, could take advantage of these changes, which were given a time limit of July 1, 2020.
Previously, any business with a turnover $50 million or less could instantly write off the cost of an asset - including a new or second-hand vehicle - at a price up to $30,000, but the changes lifted the asset cost to $150,000 and the size of the businesses to those with an aggregated turnover of up to $500 million.
Booth’s Motor Group described the policy as “the ultimate business tax deduction for buying a car”.
This week, the Federal Chamber of Automotive Industries (FCAI) lauded the government’s decision to extend that instant asset write-off offer for six months.
“Given the extraordinary economic circumstances facing many sectors in Australia, including the automotive industry, the FCAI has been calling on the government to extend this important program,” FCAI boss Tony Weber said.
“We need to kick start the new vehicle market by stimulating new vehicle purchases, and the instant asset write-off is an important tool in this process.”
The news is particularly good for those who wanted to take advantage of the tax break, but had their hearts set on a particular new ute, like the long-awaited - and vital to Mazda Australia’s success - new BT-50, which is expected to launch later this year.
While the last BT-50 had a face even a mother would struggle to love, renderings of the new version - which we expect to be officially unveiled soon - point to a far more attractive offering.
The new Mazda BT-50 will be styled by Mazda, of course, but built on architecture provided by Isuzu in the shape of its rugged and tough D-Max, a new version of which is also expected to launch very soon.
Based on the launch timing of the last new BT-50, back in 2011 (which was built on the Ford Ranger platform), Isuzu will probably get a couple of months of clear air to sell its new ute before the Mazda actually arrives in Australian showrooms, but that should still make it available well before the instant tax write-off expires.
The real excitement machine in the Aussie ute market, of course, is the new version of what is, in some months, the best-selling vehicle in this country (largely due to the fact that so many business owners buy them for work), the Toyota HiLux.
All the details on this exciting new vehicle can be found here, and it now seems almost certain that the 2021 Toyota HiLux will arrive down under in August.
With the added incentive of being able to spend up to $150,000 on one (which would be difficult), you can expect small-business owners to be queuing up at Toyota dealers when it does arrive.
Another car that will sneak its way into the ute market, of course, is the super tough Jeep Gladiator, which has finally made its way on to the Australian market this week.