• Relocation – temporary accommodation

    Legislative reference: section 61CExternal Link of the FBTAA.

    This concession reduces the taxable value of fringe benefits that arise from providing temporary accommodation (including the costs of hiring household goods) to an employee. The temporary accommodation must be required solely because the employee is required to change their usual place of residence in order to perform the duties of employment or in order to commence employment.

    The fringe benefits eligible for this reduction are:

    • an expense payment, housing or residual benefit that relates to a lease or licence for the temporary accommodation of the employee
    • an expense payment or a residual benefit that relates to a lease or licence for household goods for use in temporary accommodation of the employee.

    The benefit must be provided under an arm’s length arrangement.

    Temporary accommodation at former location

    This concession applies to temporary accommodation at the employee's former location, only if the temporary accommodation is necessary because the former home is unavailable or unsuitable for occupancy as a result of furniture removal or other factors relating to the relocation. In this case, the concession applies to the temporary accommodation for a maximum of 21 days, ending on the day the employee starts work at the new location.

    Temporary accommodation at new location

    Where the temporary accommodation is at the new location, the employee must begin to make sustained and reasonable efforts to buy or lease suitable long-term accommodation as soon as reasonably practicable after starting work at the new location.

    In order for the concession to apply, the employee must either:

    • begin to occupy a long-term unit of accommodation within four months of starting at the new location, or
    • where the employee has not started to live in a long-term unit of accommodation within four months, give a declaration to the employer relating to their efforts to find suitable long-term accommodation by the due date of the lodgment of the FBT return. The Temporary accommodation relating to relocation declaration must be in a form approved by the Commissioner (refer to Declarations).

    Employee has started to occupy a unit of accommodation within four months

    Where the employee has started to occupy a long-term unit of accommodation within four months, the concession is limited to a period that begins seven days before the day the employee starts work at the new location and ends on the day the employee could reasonably be expected to occupy the unit of accommodation after it had been purchased or leased.

    Employee has not started to occupy a unit of accommodation within four months

    If the employee has not started to occupy a unit of accommodation within four months, the concession is limited to a period that begins seven days before the day the employee started work at the new location and ends on the earlier of:

    • the day the employee could reasonably be expected to occupy the unit of accommodation after it has been purchased or leased
    • six months after the day the employee started work at the new location, or
    • 12 months after the day the employee started work at the new location.

    The 12 month period will apply where:

    • the employee owned an interest in a unit of accommodation which was their former usual place of residence
    • within six months after the relocation day a contract for the sale of their former usual place of residence has been entered into, and
    • during that period, the employee has attempted to purchase a unit of accommodation at the new location.

    Otherwise the six month period will apply.

    However, if the employee enters into a contract to purchase or lease long-term accommodation before the six or 12 month time period finishes, the concession ends on the day the employee could reasonably be expected to occupy that unit of accommodation.

    In all of the above circumstances, the employee is required to give the employer a Temporary accommodation relating to relocation declaration in a form approved by the Commissioner (refer to Declarations).

    Attention

    The concession will end before the specified time frame has elapsed if the employee ceases to make reasonable and sustained efforts to buy or lease suitable long-term accommodation.

    End of attention
      Last modified: 25 Jan 2016QC 17819