Article Highlights
The EV FBT exemption isn't ending, it's being wound back gradually starting April 2027
Existing novated leases are fully protected and won't be affected by the changes
There's a 10-month window to lock in full tax savings before the first phase begins
If you've been eyeing off an electric vehicle through a novated lease, you may have heard the news. The federal government has announced changes to the EV FBT exemption, and people are asking: when does the EV FBT exemption end date actually arrive?
Here's the short answer: it doesn't end completely. Instead, the exemption is being gradually reduced over the next few years, starting in April 2027. Let's break down what's actually happening and what it means for your wallet.
Understanding the Three-Phase Wind-Back
The government has outlined a clear timeline for adjusting the fringe benefits tax exemption for electric vehicles. It's not a sudden cut-off, but a measured approach across three phases.
Phase 1: Now Until 31 March 2027
As of right now, nothing changes. The full 100 per cent FBT exemption continues for all battery-electric cars priced below the luxury car tax threshold of $91,387. If you're thinking about getting an EV through a novated lease, you've got almost a year to lock in the current benefits.
Phase 2: 1 April 2027 to 31 March 2029
This is where some changes apply. The full exemption stays in place, but only for EVs costing $75,000 or less (including dealer delivery and options, excluding on-road costs like rego and stamp duty). If you choose an EV priced between $75,000 and the luxury car tax threshold, you'll still get a 25 per cent discount on the FBT that would normally apply.
Phase 3: From 1 April 2029 Onwards
From this point, all eligible EVs below the luxury car tax threshold receive a flat 25 per cent FBT discount. So even after 2029, you're still getting a tax advantage, it's just smaller than the current zero-FBT setup.
What This Means for Existing Novated Lease Holders
Good news if you already have an EV novated lease: you're completely protected. The FBT treatment that applied when you signed your lease contract stays locked in for the full term, typically up to five years. Even if your lease runs until 2032, you keep the tax benefits you started with.
At Easi, we've settled over 6,000 EV novated leases since the discount launched in 2022. One of the most common questions we've been fielding this week is whether existing leases will be affected. The answer is simple: they won't. Your agreement is grandfathered in.
The only time new rules would apply is if you refinance into a completely new lease after the phase-in dates.
What This Means for New Novated Lease Holders
If you're considering an EV novated lease but haven't signed yet, timing matters more than it used to. You've got a one-year window to lock in the full EV FBT exemption before the first changes kick in.
For someone in the 37 per cent income tax bracket leasing a $60,000 to $70,000 EV, that exemption can save around $6,000 to $10,000 per year. Over a standard five-year lease, waiting until after April 2027 could cost you between $14,000 and $20,000 in extra tax if your chosen vehicle sits above the $75,000 mark.
Even if you're eyeing a more affordable model under $75,000, acting now means you'll benefit from the full exemption for the entire lease term, potentially stretching well into the 2030s.
Why a Novated Lease Makes Sense Now More Than Ever
The wind-back doesn't change the fundamental benefits of salary packaging an electric vehicle. In fact, it might make the next year the best time to get one.
The grandfathering effect means locking in a lease before 31 March 2027 protects you from future changes for up to five years beyond that date. You're essentially future-proofing your tax savings.
A few EV prices have dropped over 10 per cent year-on-year on many popular models. There are now around 10 electric cars under $40,000 drive-away, and one model has dipped below $30,000 for the first time. Add in state-based stamp-duty waivers in the ACT and NT, plus lower rego costs in several states, and the numbers look better than ever.
The pre-tax treatment of running costs like insurance, tyres and charging also remains, regardless of the FBT rule change. Even after 2029, employees still get around a 25 to 30 per cent tax advantage compared to buying privately.
With 30-plus years of salary-packaging experience, we've seen policy changes before. What sets this one apart is the long lead time and the protection for existing agreements. It's a rare chance to act with certainty.
Electric Cars Worth Considering Right Now
If you're ready to take advantage of the current rules, here are some EVs sitting comfortably under the $75,000 threshold. All of these will remain fully FBT-exempt until at least 31 March 2029 if you lease before 2027, and grandfathered beyond that if you sign earlier.
The Tesla Model 3 RWD facelift comes in at $54,900 with a 513-kilometre WLTP range. It's quick, practical and one of the most popular choices we see.
The BYD Seal Dynamic is priced at $52,990 with 570 kilometres of range. It's a sleek sedan that's turning heads on Australian roads.
For urban commuters, the MG 4 Excite 51 at $34,990 drive-away offers solid value and plenty of range for daily driving.
The BYD Dolphin Premium sits at $36,990 drive-away and carries a five-star ANCAP safety rating, making it a great family option.
The GWM Ora Extended is $36,990 drive-away with 400 kilometres of range, perfect for those after something compact and stylish.
And the new-generation Hyundai Kona Electric Standard is listed at $45,990, bringing modern tech and practicality to the table.
You can explore your potential savings on any of these electric vehicles using our online calculator.
Regional Australia Is Leading the Charge
Interestingly, the strongest uptake of the EV tax discount isn't happening in inner-city postcodes. Areas like Gosford on the NSW Central Coast, Kellyville in Western Sydney, Werribee in Victoria and Toowoomba in Queensland are among the highest per-capita users of the scheme.
That makes sense when you consider the rising cost of fuel. The average price of unleaded has been rising heavily over $2.10 per litre since January 2026, and anyone doing a long commute is feeling it. An EV through a novated lease removes that pain point entirely, with charging costs bundled into your pre-tax salary.
State incentives also stack with the federal exemption. These extras add up, especially for regional drivers.
How Easi Helps You Get Ahead of the Changes
Easi has been helping Australians save on car expenses since 1992, and the last few years have been some of the busiest we've seen. The combination of rising fuel costs, falling EV prices and generous tax treatment has created a perfect storm for novated leasing.
Our dedicated electric vehicles team handles everything from sourcing the car to managing the ATO-compliant FBT reporting, so your employer has zero admin. We've also built relationships with manufacturers that let us secure bulk-buy discounts on in-demand models and charger bundles.
If you've got questions about how the EV FBT exemption novated lease changes affect your situation, our team can walk you through the numbers. Every person's circumstances are different, and we'll tailor the advice to your income, the car you want and the timeline you're working with.
Lock in Your Savings Before the Clock Runs Out
The EV FBT exemption end date isn't a cliff edge, but it is a countdown. You've got until 31 March 2027 to secure the full tax benefit on any EV below the luxury car tax threshold, and that window is already ticking.
Whether you're in Toowoomba or Terrigal, driving a Dolphin or a Model 3, the message is the same: acting sooner rather than later could save you thousands over the life of your lease.
Want to see how much you could save on your next car? Use our savings calculator or get in touch with our expert team to talk through your options. We're here to make it Easi.
Frequently Asked Questions
What is the EV FBT exemption end date in Australia?
The EV FBT exemption doesn't have a single end date. It's being wound back in three phases starting 1 April 2027. The full exemption continues until 31 March 2027, then reduces progressively until 1 April 2029 when all eligible EVs receive a 25 per cent FBT discount instead of full exemption.
Will my existing novated lease lose the FBT exemption after 2027?
No. Existing novated leases are fully grandfathered. The FBT treatment you had when you signed your lease stays in place for the entire lease term, regardless of future rule changes.
How does the $75,000 cap work from April 2027?
From 1 April 2027 to 31 March 2029, only EVs costing $75,000 or less (including dealer delivery and options, excluding on-road costs) will keep the full FBT exemption. EVs priced between $75,000 and the luxury car tax threshold will receive a 25 per cent discount on payable FBT instead.
What happens from 1 April 2029?
From 1 April 2029 onwards, all eligible EVs below the luxury car tax threshold receive a permanent 25 per cent discount on FBT. This replaces the full exemption but still provides a tax advantage compared to petrol or diesel vehicles.
Is an electric novated lease still worth it after the changes?
Yes. Even with the wind-back, novated leases still offer significant tax savings through pre-tax salary deductions on the car and all running costs. The 25 per cent FBT discount from 2029 onwards still gives you a substantial advantage over buying privately.
