ATO Statutory Residual Values on Novated Leases (TD 93/142 Explained)

At the conclusion of an Australian novated lease agreement, a mandatory residual balloon payment falls due. Governed by Australian Taxation Office (ATO) Taxation Determination TD 93/142, statutory minimum residual percentages ensure that novated lease agreements reflect commercial depreciation standards.

This guide details official ATO statutory residual tables, end-of-lease options, tax-free equity potential, and balloon refinancing strategies.

1. Official ATO Minimum Residual Percentage Table (TD 93/142)

Under ATO regulations, a novated lease cannot amortize a vehicle's balance to $0 during the lease term. The table below outlines the statutory minimum residual percentages based on total lease duration:

2. Your 4 End-of-Lease Options

When your novated lease term reaches maturity, you have four flexible options:

1. 1
   Trade In / Upgrade to a New Car:

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  Trade in your vehicle with a dealer or sell it privately.
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  The sale proceeds pay off the statutory residual balloon. Any surplus cash profit is 100% tax-free under personal vehicle CGT exemptions!

1. 1
   Refinance the Residual Balloon:

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  Extend the lease on your existing car for another 1 to 3 years. A new residual schedule applies to the remaining balance.

1. 1
   Payout the Balloon & Keep the Vehicle:

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  Pay the statutory residual balloon out of pocket using savings to own the vehicle outright with zero debt remaining.

1. 1
   Sell the Vehicle Privately:

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  Sell the vehicle on the open market, payout the financier, and pocket any remaining equity tax-free.

3. Calculate Your Statutory Residual Balloon

Determine your exact ATO statutory residual balloon and compare monthly lease outlays using Calcivo's Novated Lease Calculator.