Practice Vehicle
Last reviewed 13 June 2026 by Nick Lim, finance broker (FBAA).
Practice Vehicle is a car owned or financed by a practice and used for business, which brings both finance and tax considerations. It is usually funded by a chattel mortgage or a novated lease, and any private use can trigger FBT. How the vehicle is financed and packaged affects both the practice's cashflow and the owner's tax position.
Why Practice Vehicle Matters
A practice car sits at the join of finance and tax, so the structure matters as much as the price.
- Funded by a chattel mortgage or novated lease
- Private use can trigger FBT
- Affects practice cashflow and owner tax
- Depreciation and GST treatment apply
- Structure depends on usage split
Common Features of Practice Vehicle
- Business-use vehicle
- Chattel mortgage or novated lease
- FBT on private use
- GST and depreciation claims
- Logbook supports the business share
Official reference: ato.gov.au
What is a practice vehicle?
A car owned or financed by a practice and used for business, with finance and tax implications.
How is a practice vehicle financed?
Usually a chattel mortgage or a novated lease, depending on structure.
Does a practice vehicle attract FBT?
Private use can trigger FBT, so the usage split and structure matter.
Can I claim GST and depreciation?
Generally yes on the business-use share, supported by a logbook.
Chattel mortgage vs novated lease?
A chattel mortgage suits business ownership; a novated lease packages the car through salary.