There are four simple prerequisites which need to be met if you are to take out a novated lease on a car. These requirements are simple, making it more straightforward for you to get a tax break when buying a car.
- You must be permanently employed
Whether you are employed full time or part-time, you are eligible for a novated lease. However, if you are a casual employee, you are not eligible because your salary may fluctuate.
The most enticing aspect of a novated lease is that you can save money by reducing the amount of income tax and GST you pay. With salary packaging, your car’s monthly cost is deducted before your tax is deducted, thereby decreasing the amount of income tax you pay and increasing your take-home salary.
- You must have completed your probation period
When you start a new job, there is a probation period you have to complete in order to secure your position within the company. Only once you have completed this period of your employment, you should be then eligible for a novated lease. Although, some lenders will approve someone still in probation, so long as there is industry/role continuity and as long as your employer allows you and signs the Deed of novation.
- Your employer must offer salary packaging
Because a novated lease is a contract between you, your employer, and the financier, without your employer’s approval you will not be eligible for a novated lease. Some companies just don’t offer salary packaging. Companies which do will discuss their salary packaging policies and help you get a novated lease.