Posted on October 8th, 2025 by Paul Lyons
Purchasing a car through your company can be an attractive proposition, but it’s essential to understand the GST rules and potential pitfalls, especially when it comes time to sell.
GST Cap on Car Purchases
When a business purchases a car, it can generally claim a GST credit for the GST included in the purchase price but only up to a capped amount. For the 2025–26 financial year, the car cost limit is $69,674, which means the maximum GST credit claimable is $6,334 (i.e. 1/11 of the limit).
Even if the car costs significantly more say $200,000 the GST credit is sti…
