Luxury tax in: what cars to pay for and how to calculate it

What is luxury tax and why does it affect car owners?

Since 2014, Russia has had the so-called luxury tax — additional fee for owners of expensive cars. Despite the name, this tax applies not only to millionaires with exclusive supercars, but also to ordinary drivers who bought a car above a certain threshold. The main problem is that many do not even suspect that their car is subject to this tax until they receive a notification from the Federal Tax Service.

In 2026, the rules remain the same, but the thresholds are indexed annually. The tax is calculated not according to market value, but according to average market price, which is determined by the Ministry of Industry and Trade. This means that even if you bought a used car at a bargain price, the tax may be calculated based on its “official” value. For example, Toyota Land Cruiser 200 A 2020 model can cost the owner tens of thousands of rubles in additional payments - even if it was sold cheaper on the secondary market.

Key Point: Luxury Tax does not replace transport tax, but complements it. That is, the owner will have to pay both. In this case, the amounts may turn out to be comparable - especially for cars older than 3 years, where the coefficient increases. Next, we will look at exactly which cars are subject to this fee, how it is calculated, and what to do if you do not agree with the charges.

Luxury tax eligibility criteria: cost, age, power

The luxury tax applies to cars that simultaneously satisfy three conditions:

• 💰 Cost above the threshold (updated annually). In 2026 it is 3 million rubles for cars under 3 years old and 5 million rubles for cars older than 3 years.
• 📅 Age less than 20 years old (cars older than 2004 are exempt).
• 🔧 Engine power more than 90 hp (for electric vehicles - equivalent power).

Important: threshold prices are determined not under a sales contract, and according to the reference book of the Ministry of Industry and Trade. For example, if you bought BMW X5 2021 for 2.8 million rubles, but its average market value according to the state register is 3.2 million, then you will have to pay tax. At the same time, for cars older than 3 years, the threshold is higher (5 million), but the tax coefficient also increases.

Exceptions:

• 🚜 Trucks, buses, special equipment.
• 🚑 Ambulances, firefighters, police.
• 🔌 Electric vehicles with a power of up to 150 kW (204 hp) - the benefit applies to them until 2026.

⚠️ Attention: If your car is included in the register of the Ministry of Industry and Trade as “luxury”, but you do not agree with this, you can challenge the assessment. To do this, you need to submit an application to the Federal Tax Service with evidence of the real market value (for example, appraiser reports or data from car markets).

Find out the average market value of your model on the website of the Ministry of Industry and Trade|Compare with threshold values (3 or 5 million)|Check the engine power in the title|Check the year of manufacture (important for the coefficient)-->

List of cars subject to luxury tax in 2026

The Ministry of Industry and Trade annually publishes a list of models that could potentially be subject to tax. In 2026 it included:

Brand	Model (generation)	Threshold value (RUB million)	Minimum tax (thousand rubles/year)
Mercedes-Benz	G-Class (W463)	8,5	150–300
Toyota	Land Cruiser 200 (2015–2021)	5,2	80–180
Porsche	Cayenne (92A, 958)	6,0	100–250
Lexus	LX 570 (URJ200)	7,1	120–280
BMW	X7 (G07)	6,8	110–220

The full list (more than 500 models) can be found on the website of the Ministry of Industry and Trade in the section Lists of vehicles. Please note: the registry includes not only premium brands, but also some “folk” models in top trim levels. For example, Kia Telluride 2023 with a 3.8 liter engine may be subject to tax if its cost exceeds 3 million rubles.

How to check your car:

1. Find the VIN code in the vehicle title or under the windshield.
2. Enter it on the site Ministry of Industry and Trade in the "Vehicle check" section.
3. The system will show the average market value and luxury tax status.

Why are there budget brands on the list?

Some models Hyundai, Kia or even Volkswagen are included in the register due to top trim levels with powerful engines (for example, Hyundai Santa Fe 2.5T or VW Touareg 3.0 TDI). Even if the basic version costs less than 3 million, an expensive modification can cross the threshold.

How is luxury tax calculated: formula and examples

The amount of tax depends on three parameters:

1. Car cost (according to the Ministry of Industry and Trade).
2. Age (up to 3 years or older).
3. Engine power (in hp).

Calculation formula:

Tax = (Cost − Threshold) × Coefficient × Rate

Where:

• Threshold — 3 million ₽ (up to 3 years) or 5 million ₽ (over 3 years).
• Coefficient — 1.1 for cars up to 3 years old, 2.0 for cars older than 3 years.
• Rate — 1 ruble for each hp. (for gasoline and diesel internal combustion engines).

Example 1: Lexus RX 350 2022, cost 4 million rubles, power 300 hp.

(4,000,000 − 3,000,000) × 1.1 × 300 = 330,000 rubles per year.

Example 2: Toyota Land Cruiser 200 2019, cost 5.5 million rubles, power 235 hp.

(5,500,000 − 5,000,000) × 2.0 × 235 = 235,000 rubles per year.

⚠️ Attention: For hybrid cars, power is calculated as the sum of the power of the internal combustion engine and the electric motor. For example, Lexus NX 450h+ with a system power of 306 hp. will be taxed at the full rate, even if its internal combustion engine produces only 186 hp.

How to reduce or avoid luxury tax: legal ways

You can completely avoid the tax only if your car does not meet the criteria (price below the threshold, age more than 20 years or power ≤ 90 hp). However there is legal ways to reduce the amount:

• 📉 Challenge the assessment of the Ministry of Industry and Trade. If the real price of a car on the secondary market is lower than the official one, submit an application to the Federal Tax Service with evidence (reports of independent appraisers, data from car markets).
• 🔧 Reduce engine power. It is technically possible to reflash the ECU to reduce hp. (but this requires approval from the traffic police and may affect the dynamics of the car).
• 🚗 Sell the car before the end of 3 years. After this threshold, the coefficient increases from 1.1 to 2.0, but the threshold cost also increases from 3 to 5 million rubles.
• 🔌 Switch to an electric car. For electric cars with power up to 150 kW (204 hp), the luxury tax does not apply until 2026.

Important: do not try to underestimate the value in the purchase and sale agreement. The Federal Tax Service is guided by data from the Ministry of Industry and Trade, and not by the transaction amount. But you can use gift agreement between close relatives - in this case, no tax is charged (but only if the donor has not paid luxury tax for this car before).

Another nuance: if the car is leased, the leasing company pays the tax, but can include it in monthly payments. Please check this point when signing the contract.

What happens if you don’t pay luxury tax: fines and consequences

Luxury tax applies to property fees, therefore, the same sanctions are provided for non-payment as for late transport tax:

• 📜 Peni. The following are charged for each day of delay: 1/300 of the Central Bank refinancing rate (for 2026 - ~0.08% per day).
• 🚨 Fine. 20% of the unpaid amount (if the Federal Tax Service proves intentional evasion - up to 40%).
• 🚔 Seizure of property. In case of large debt (from 300 thousand rubles), the car or accounts may be seized.
• ✈️ Restrictions on traveling abroad. If the debt exceeds 10 thousand rubles, they may prohibit leaving the Russian Federation.

Example: if you have not paid 200 thousand rubles in tax for 2023, then in a year the debt will grow to:

200,000 (tax) + 200,000 × 0.08% × 365 (fines) + 40,000 (20% fine) ≈ 260,000 ₽.

To avoid problems:

1. Check notifications from the Federal Tax Service in your personal account at nalog.ru.
2. If you have not received a notification, request up-to-date information through State Services or the local Federal Tax Service.
3. If there is an error in the calculation (for example, the cost of the car is incorrect), submit clarifying declaration.

⚠️ Attention: If you sold a car, but the tax continues to accrue, provide the Federal Tax Service with a copy of the purchase and sale agreement. Otherwise, the debt will “hang” behind you.

Luxury tax vs transport tax: what is the difference

Many people confuse luxury tax with transport tax, but this two different payments:

Criterion	Luxury tax	Transport tax
Basis of calculation	Cost and power	Power only
Thresholds	From 3 or 5 million ₽	From 90 hp
Who pays	Owners of expensive cars	Owners of any cars (except beneficiaries)
Where is he going?	Federal budget	Regional budget
Benefits	Only for electric vehicles until 2026	Large families, disabled people, veterans, etc.

The main difference: the transport tax is paid every owner of a car more powerful than 90 hp., and the luxury tax applies only to those whose cars are more expensive than the threshold cost. However, both taxes can be calculated simultaneously. For example, for Mercedes-Benz S-Class By 2023, you will have to pay both transport tax (at the regional rate) and luxury tax (at the federal rate).

Another nuance: transport tax can be reduced or eliminated through regional benefits (for example, for pensioners in some areas). But there are no luxury tax benefits, except in the case of electric vehicles.

FAQ: Frequently asked questions about luxury tax

My car costs 2.9 million rubles, but the Ministry of Industry and Trade register shows 3.1 million. Do I need to pay tax?

Yes, the tax is calculated according to the Ministry of Industry and Trade, and not according to the actual purchase price. To challenge the assessment, submit an application to the Federal Tax Service with evidence of market value (appraiser reports, car market data).

I bought a car on credit. Who pays the luxury tax - me or the bank?

The tax is paid by the owner of the car (that is, you), even if the car is pledged to the bank. The exception is leasing, where the payer is the leasing company.

Is it possible not to pay tax if the car is being preserved?

No, the luxury tax does not depend on the actual use of the vehicle. Even if the car is parked in a garage without moving, the tax is calculated according to the standard scheme.

How does luxury tax affect the cost of compulsory motor insurance?

There is no direct impact, but insurance companies may take into account the high cost of the car when calculating the rate. In some cases, MTPL for “luxury” cars costs 10–20% more.

Are there plans to abolish the luxury tax in 2026?

There are no official announcements regarding cancellation at this time. However, extension of benefits for electric vehicles and hybrids after 2026 is being discussed.