The Truth About the Range Rover Tax ‘Loophole’

A popular social media claim about a legal “tax loophole” is making the rounds, with “get rich quick” creators advising people to write off the cost of a luxury vehicle like a Range Rover or Mercedes-Benz G-Wagon on their taxes. But is this too good to be true? Of course. It always is. When it comes to your finances—especially taxes—any sort of “loophole” is probably too good to be true. Here’s what to know about the so-called “Range Rover loophole,” and what it means for you trying to get a tax write-off on a luxury car.

What is the ‘Range Rover tax loophole?’

The claim originates from creators in the “get rich quick” space promoting a way for individuals to allegedly write off a significant portion or all of the cost of an expensive vehicle through a special tax deduction. They have cited Section 179 of the IRS tax code as the basis for this purported loophole.

Unfortunately, this is classic TikTok financial advice. The truth is, according to the IRS Section 179 tax code, businesses may be able to write off a G-Wagon if it’s used for business purposes at least half of the time. Section 179 does allow businesses to deduct the full cost of certain assets like vehicles in the year they are placed into service, rather than depreciating the expense over several years. But there are very strict requirements. Additionally, there are limits on the deductible amount for luxury vehicles that exceed $19,800 for cars and $20,500 for trucks and vans in 2023.

What this means for you

Despite what your TikTok feed might try to tell you, you can’t just go out and buy a Range Rover for personal use and write the whole thing off. The IRS is very clear that vehicles for personal transportation don’t qualify, even if you use them for incidental business transportation.

In essence, the “Range Rover loophole” is not a loophole at all for the average individual. It relies on a legitimate but narrowly defined tax deduction that applies only to certain small businesses with a genuine need for pricey work vehicles like heavy-duty trucks.

So while viral claims of an easy way to write off a luxury personal vehicle sound enticing, they don’t align with tax law realities. As with most “get rich quick” schemes, if it seems too good to be true, it likely is.