The existing Clean Car Discount scheme (effective 1 July 2021 to 31 December 2021) aims to encourage New Zealanders to purchase electric or low-CO2 emission light vehicles. This is by making the cost of eligible new and used fuel-efficient vehicles comparable to petrol and diesel vehicles. The Clean Car Discount only applies to new and used vehicles registered in New Zealand for the first time. Vehicles with a purchase price tag of $80,000 or more (inclusive of GST and on-road costs), and those with less than a 3-star safety rating, will not be eligible for a rebate.
The rebates are:
- New EV (battery electric vehicle) = $8,625 (GST inclusive)
- New PHEV (plug-in hybrid electric vehicle) = $5,750 (GST inclusive)
- Used EV = $3,450 (GST inclusive)
- Used PHEV = $2,300 (GST inclusive)
Organisations and individuals that are GST registered and that use the vehicle in their GST taxable activity will need to return GST on these rebates like they do for other income. However, these rebates are not subject to income tax. The rebate must be deducted from the cost of the vehicle to determine the depreciation cost base of the vehicle.
For public authorities, the rebate payments are less GST.
Rebate applications can be made online and require the sale agreement, plate number and bank account details and the vehicle must be registered for its first time in New Zealand after 30 June 2021.
If proposed new legislation is passed, from 1st January 2022 the Clean Car Discount will be extended and modified to be based on a vehicle’s CO2 emissions, where vehicles with zero or low emissions will qualify for a rebate and vehicles with high emissions will incur a fee. Such a fee would not be an immediately deductible expense for tax purposes but could be added to the depreciation cost base of the vehicle.
For more details visit Waka Kotahi, the NZ Transport Agency website.