Budget 2022: Luxury cars now subject to new ARF tier

Cars with OMVs exceeding $80,000 will fall under a new 220% ARF tier.

As announced in Budget 2022, the Government is rolling out higher taxes that not only affect high-end properties, but luxury cars as well.

LTA will be taxing ultra-luxury vehicles with a new tier of Additional Registration Fees (ARF) that will subject models with an Open Market Value (OMV) in excess of $80,000 to an ARF rate of 220%.

Previously, the highest tier that applied to vehicles with an OMV in excess of $50,000 was 180%.

Under the old rules, buyers of supercars from brands such as Lamborghini and Ferrari were the ones usually affected. Now, buyers of top-tier luxury models such as the Mercedes-Benz S-Class and BMW 7 Series, will have to fork out more as well.

For instance, a BMW 7 Series 730Li M Sport, which has an OMV of $91,142, was subject to an ARF of $136,056 under the 180% multiplier. But with the new rules, its ARF now amounts to $140,508 – an increase of over $4000.

Supercar buyers will have to pay more for the pleasure of exotic motoring.

Cars with much higher OMVs will obviously see a greater increase. When subject to the new 220% ARF tier, the Ferrari F8 Tributo, which has an OMV of $284,148, will cost an extra $80,000 compared to before.

The F8 Tributo is currently priced at $998,000 without COE.

The new ARF structure will be implemented quickly. It will start from the second COE bidding exercise this month, which is scheduled to take place on 23 February 2022.

Budget 2022 also saw the same promises of prioritising EVs in the years to come, with reiterations that more charging stations are set to arrive at the doorsteps of residents in HDB estates.

The Government has also pledged to go carbon-neutral by 2050.