• Exemptions

    Most housing benefits provided in remote areas are exempt from FBT.

    A housing benefit qualifies as a remote area housing benefit if each of the following conditions is satisfied:

    • for the whole of the tenancy period, the unit of accommodation is in a remote area
    • for the whole of the tenancy period, the accommodation is occupied by a person who is a current employee of the entity, and the usual place of employment of the employee is in the remote area
    • it was necessary for the employer to provide or arrange for the provision of residential accommodation for employees because:
      • the nature of the entity's business is such that employees are liable to move frequently from one residential location to another
      • there is insufficient suitable residential accommodation otherwise available at or near the place or places where the employees are employed, or
      • it is customary in that industry for employers to provide free or subsidised residential accommodation to employees.
       

    Where circumstances warrant, the Commissioner of Taxation has a discretion to treat an employee who resides or works just outside a remote area as residing or working in a remote area if the person lives near the boundary.

    For most employers, accommodation is in a remote area if it is not either:

    • less than 40 kilometres from an eligible urban area with a census population of 14,000 to less than 130,000
    • less than 100 kilometres from an eligible urban area with a census population of 130,000 or more.

    Population figures are based on the 1981 census.

    An extended exemption applies to housing benefits provided for employees of a:

    • public hospital
    • government body where the duties of the employee are exclusively performed in, or in connection with, a public hospital or a non-profit hospital
    • public ambulance service
    • police service.
    Attention

    The extension of the remote area test for hospitals, charities, public ambulance services and the police force that applies to the remote area housing exemption does not apply to remote area housing assistance concessions.

    End of attention

    A list of remote and non remote towns is included in Law Administration Practice Statement PS LA 2000/6.

    Attachment 1 of the practice statement applies to those entities who do not receive the benefit of the extended remote area. Housing benefits provided by these entities to employees in Cairns, Darwin and Townsville will not be treated as exempt remote area housing benefits.

    Attachment 2 of the practice statement applies to those entities that are able to receive the benefit of the extended remote area. Housing benefits provided by these entities to employees in Cairns, Darwin and Townsville will be treated as exempt remote area housing benefits.

    Further Information

    For more on remote area concessions exemptions for housing fringe benefits, refer to Reductions in fringe benefit taxable value and Fringe benefits tax exempt benefits.

    End of further information
      Last modified: 17 Jul 2012QC 21998