NSW Government to abolish stamp duty on electric vehicles to drive sales

The NSW Government will remove stamp duty on electric vehicles to encourage drivers to make the switch to battery-powered cars with the goal of having EVs make up 50 per cent of all new car sales within 10 years.

The ambitious $490 million plan will be revealed at this week’s state budget and will include a huge investment on creating charging infrastructure in NSW.

EVs priced at $78,000 or less from September this year will incur no stamp duty – saving drivers up to $1200.

Also announced was a $3000 rebate which will be given to the first 25,000 electric vehicles sold in NSW at $68,000 and under.

But the NSW Government is giving with one hand and taking with the other with EV drivers set to be hit with a new road tax by 2027.

The road user charge of 2.5 cents a kilometre will be imposed either by 2027 or once electric vehicles constitute 30 per cent of all new car sales – whichever comes first.

Traditionally when drivers spend money on petrol for their vehicles, a large portion of that sale is directed to the government in taxes to maintain the roads in Australia.

As more and more drivers adopt electric vehicles which need charging and not fuel, this figure is set to plummet alongside petrol sales – hence the reason for this new EV road tax.

The Victorian governments road user tax of 2.5 cents per kilometre kicks in from July 1, 2021.

Based on those figures it will work out that a driver who travels the average distance of 15,000 kilometres per year will pay $375.

The NSW Government says that once the distance-based tax is in place, stamp duty all electric vehicles and plug-in hybrids will be abolished.

“Our comprehensive strategy is about making sure we have the right mix in place to incentivise the take-up of electric vehicles while ensuring everyone who drives on our roads contributes to funding and maintaining them,” said NSW Treasurer Dominic Perrottet.

The government says it will spend $171 million on rolling out new electric vehicle charging infrastructure across NSW as well as a further thirty three million to transition the government fleet to EVs.

At the weekend, the NSW Government released a detailed report called the Electric Vehicle Strategy.

The report outlines plans to make NSW the most affordable place to own an electric vehicle in Australia with the goal of allowing EVs to use car pool lanes and creating priority parking spots for charging.

Currently electric vehicles make up less than one per cent of all new car sales in Australia.