On 1 July 2014, the Personal Property Securities Amendment (Motor Vehicles) Regulation 2014 (MV Regulation) commenced. As we foreshadowed in our previous Update of 7 April 2014, the MV Regulation amends the definition of “motor vehicle” used by the Personal Property Securities Regulations 2009 and associated Act.
Now, to be classified as a “motor vehicle” the asset must:
- be capable of a speed of at least 10 km/h; and
- have on or more motors that have a total power greater than 200W; and
- has a VIN, manufacturers number, or chassis number; and
- not run on rails, tram lines or other fixed path.
The seemingly small amendment from the word “or” to the word “and” at the end of requirement 1 above is intended to raise the preconditions for an asset to be classified as a “motor vehicle”. Time will determine whether this has the desired effect of reducing the number of assets classified as a “motor vehicle”.
In addition, it is anticipated that the definition of PPS Lease will soon be amended to remove the “90 day rule” for serial numbered goods (including motor vehicles). The result will be that an arrangement will only classify as a PPS Lease if the term of the agreement is, for all property, no end time or more than 12 months. The relevant Bill remains before Parliament and has not yet commenced.