The Australian Taxation Office has updated the car cost limit for depreciation for the 2020-21 financial year.

The car cost depreciation limit is the maximum value that can be assigned to a vehicle for the purpose of a depreciation claim. This figure is applicable to all cars, including station wagons and four-wheel-drives and is assessed and updated annually.

For the 2020-21 financial year, the depreciation limit will be increased for the first time since the 2016-17 financial year. The new limit has been set at $59,136, up from $57,581.

When calculating a depreciation claim, the depreciation limit for the financial year in which a vehicle has originally been purchased or leased is to be used.

The depreciation value limit is indexed annually in line with the ‘motor vehicle purchase sub-group’ of the Consumer Price Index.

Source: Australian Taxation Office | Buying and using assets

2 June 2020