A Novated Lease is one of the most popular benefit items included in a salary
packaging arrangement with Southgate.
A Novated Lease is a three-way arrangement between an employer, an employee and
a finance company to finance a car. Under this agreement, the obligations under
the finance lease are transferred from the employee to the employer through a Deed
of Novation, meaning the employer assumes the responsibility for making lease payments
to the financier from the employee’s pre-tax salary sacrificed deductions. The Deed
of Novation remains in force until the end of the lease term, or termination of
the employee’s employment, whichever occurs first.
A Novated Lease allows you to
salary package the car of your choice. You can choose between
a new car, a used car or even your existing car (via a sale-and-leaseback).
The tax savings on a Novated Lease occur due to the concessional Fringe Benefits
Tax (FBT) treatment of cars. The savings are substantially increased by including
all the running costs of the car paid for from your pre-tax salary, completely free
from income tax and FBT.
This allows you to save up to 47% on running costs including:
- Lease payments
- Fuel
- Servicing & maintenance
- Registration & CTP
- Comprehensive insurance
- Tyres
- Roadside assistance
- Car wash