GST on Second-Hand Cars calculator

There are two kinds of second-hand car transactions in Australia: dealer sales (where GST applies) and private sales (where it doesn’t). That binary decides the GST answer entirely. Once you know which side you’re on, the maths is the same as any other GST calculation.

Below: who pays, the dealer vs private sale split with worked examples, the rules when you’re the seller, the stamp duty vs GST distinction, business vehicle credits and the Luxury Car Tax threshold for high-end purchases.

Do you pay GST on a second-hand car?

Depends on who’s selling it.

• Buying from a GST-registered dealer: Yes, GST applies. The dealer charges 10% GST on the sale price, which is included in the advertised total under Australian Consumer Law.
• Buying privately (from another individual): No, GST doesn’t apply. Private sellers aren’t GST-registered businesses, so they can’t charge GST.
• Buying from an unregistered small business: No, same as private. If the seller’s turnover is below $75,000 and they haven’t voluntarily registered, no GST applies.

The dealer/private split is the headline rule, and it’s the reason advertised prices on a $20,000 dealer car and a $20,000 private car represent different underlying values.

GST when buying from a dealer

Dealer prices are GST-inclusive. A car advertised at $22,000 from a Toyota dealer or a Suttons used car lot has $2,000 of GST baked in. The split:

• Inclusive total: $22,000
• GST = $22,000 ÷ 11 = $2,000
• Ex-GST = $22,000 ÷ 1.1 = $20,000

Australian Consumer Law requires the dealer to show the GST-inclusive figure as the headline price. They can’t hide GST in ‘on-road costs’ or extra fees. If the price tag says $22,000, that’s the cash-out figure for the car itself (excluding stamp duty and rego, which are separate).

GST when buying privately

Private sellers don’t charge GST. A car listed at $20,000 on Carsales, Gumtree or Facebook Marketplace by an individual is GST-free in both directions – the seller doesn’t collect GST and there’s nothing for the buyer to claim back.

That’s also why a private sale can look better value than a dealer sale at the same headline price. A $22,000 dealer car represents $20,000 of underlying car value plus $2,000 GST. A $22,000 private sale is $22,000 of car value with nothing on top. The trade-off: private sales come with no warranty, no dealer-backed cooling-off period and no consumer law protection beyond a basic title check.

GST when selling your own car

Three scenarios:

• You’re selling privately and you’re not GST-registered. No GST on the sale. The proceeds go in your pocket – tax treatment depends on whether the car was a personal asset (no income tax) or a business asset (different rules apply).
• You’re trading in to a dealer and you’re not GST-registered. No GST on the trade-in. The dealer might claim a notional input tax credit when they on-sell the car, but that’s the dealer’s concern, not yours.
• You’re a GST-registered business selling a vehicle. GST applies to the sale price. If the car was used in the business and the GST was claimed when you bought it, GST flows through to the buyer on disposal.

Selling a business car catches sole traders out – the GST has to come out of the sale proceeds and land on the next BAS at label 1A.

Stamp duty vs GST – not the same thing

Stamp duty and GST are different taxes that often get confused. The differences:

• GST is a federal tax of 10% on dealer sales, applied to the price before stamp duty. It’s already in the dealer’s advertised price.
• Stamp duty is a state-level transfer duty paid to your state revenue office (VicRoads, Service NSW, QRO, etc.) when you register the vehicle in your name. It’s calculated on the sale price (or market value) and varies by state and vehicle value.

You pay both on a dealer car – GST is in the headline, stamp duty is a separate line at registration. On a private sale, no GST applies but stamp duty still does.

Business vehicle GST credits

If you buy a second-hand car from a GST-registered dealer for genuine business use, the GST is generally claimable as an input tax credit on the next BAS. The mechanics:

• Buying from a dealer. The dealer issues a tax invoice. Claim the GST portion (1/11 of the inclusive price) at BAS label 1B.
• Buying privately. Trickier. The seller can’t issue a tax invoice because they’re not registered, but the buyer’s accountant can sometimes claim a notional input tax credit if the car will be used for business and certain conditions are met. Worth checking with a registered tax agent.
• Mixed business and personal use. GST credits are only claimable on the business-use percentage. A car used 60% for business gets 60% of the GST claimed.

The car-cost limit also caps the claim. For 2025-26 the limit is around $69,674, and any GST credit on the portion above the limit isn’t claimable. The exact figure changes each financial year – check the ATO car cost limit page for current numbers.

Luxury cars and the LCT threshold

Above a certain price, a separate Luxury Car Tax (LCT) kicks in on top of the GST. The thresholds for 2025-26:

• Fuel-efficient vehicles (under 7L/100km combined): around $91,387
• Other vehicles: around $80,567

LCT applies at 33% on the value above the threshold (not the whole price). So a $100,000 dealer car that exceeds the standard threshold by roughly $20,000 attracts LCT on the $20,000 portion, in addition to the standard 10% GST.

For most second-hand cars LCT doesn’t come up – it only triggers above the threshold. The exact figures change every July with CPI indexation, so check the ATO LCT thresholds page for the current financial year.

FAQs

The calculators and guides on gstcalculator.net.au are for general information only and do not constitute tax, financial, or legal advice. Consult a registered tax agent for advice specific to your situation.