2013 luxury car limit depreciation
Cars with a higher value have a ceiling value assigned to them for the purposes of depreciation claims.
Depreciation (“decline in value”) claims for Work Related Car Expenses may only be used for the ‘one-third of actual expenses’, or ‘log book’ methods.
When applicable, the depreciation limit applies to cars, station wagons and four wheel drives.
There are exemptions associated with use of vehicles by or for, certain disabled persons, and hearses.
The value limits are indexed annually to the ‘motor vehicle purchase sub-group’ of the CPI.
The limit that applies to each car is the limit applicable for the year in which the car is first used for business purposes.
GST and the car depreciation limit
A car purchased for more than the car depreciation limit has a maximum GST credit of one-eleventh of the limit.
Thus for 2013-14, the maximum GST credit would be $5, 224 (that is, 1/11 x $57, 466). This same limit also applies to cars which are fuel efficient.
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Why do luxury sedans depreciate so quickly vs. other types of car?
Because they were over priced in the first place, they are bought for reasons of conspicuous consumption not as an investment. If you want to spend more then 100k on a car and not lose 1/3 of it the minute you drive of the lot engage a professional broker and purchase a classic car at auction under the guidance of the expert.