Fringe Benefits Tax Assessment Act 1986

PART III - FRINGE BENEFITS  

Division 6 - Housing fringe benefits  

Subdivision B - Taxable value of housing fringe benefits  

SECTION 26   TAXABLE VALUE OF NON-REMOTE HOUSING FRINGE BENEFITS  

26(1)    

Subject to this Part, the taxable value of a housing fringe benefit provided in respect of the employment of an employee in relation to a year of tax is:

(a)    where the recipients unit of accommodation is not located in a State or internal Territory - so much of the market value of the recipients current housing right as exceeds the recipients rent;

(b)    

where:

(i) paragraph (a) does not apply;

(ii) the recipients unit of accommodation is a caravan or mobile home or is in a hotel, motel, hostel or guesthouse; and

(iii) during the whole or a part of the tenancy period, the provider carried on a business consisting of or including the provision to outsiders, in respect of identical or similar caravans or mobile homes or in respect of identical or similar units of accommodation in the hotel, motel, hostel or guesthouse, of leases or licences that are identical or similar to the recipients overall housing right;

the amount calculated in accordance with the formula AB,

where:

A is the market value of the recipients current housing right; and

B is:

(iv) in a case where, if the fringe benefit were not a housing fringe benefit, it would be an in-house residual fringe benefit - 0.75; and

(v) in any other case - 1;

reduced by the recipients rent; and

(c)    

in any other case - the amount calculated in accordance with the formula:

AB C

where:

A is the statutory annual value of the recipients current housing right;

B is the number of whole days in the tenancy period; and

C is the number of days in the year of tax;

 

reduced by the recipients rent.

26(2)    
For the purposes of the application of subsection (1) in relation to a housing fringe benefit in relation to an employer in relation to a year of tax (in this subsection referred to as the current year of tax ), the statutory annual value of the recipients current housing right is:

(a)    

if the current year of tax is a base year of tax in relation to the recipients current housing right - the amount calculated in accordance with the formula:

AB C

where:

A is the market value of the recipients current housing right;

B is the number of days in the current year of tax; and

C is the number of whole days in the tenancy period; and

(b)    in any other case - the amount ascertained in accordance with the formula AB,
where:

A is:

(i) if the year of tax immediately preceding the current year of tax was a base year of tax for the purpose of calculating the taxable value of:

(A) a housing fringe benefit in relation to the employer in respect of the recipients overall housing right or in respect of an equivalent housing right; or

(B) each of 2 or more such housing fringe benefits;

the statutory annual value for the purposes of calculating the taxable value of the fringe benefit referred to in sub-subparagraph (A) or the weighted average of the statutory annual values for the purpose of calculating the taxable values of the housing fringe benefits referred to in sub-subparagraph (B) (those statutory annual values being weighted on the basis of the lengths of the respective periods during that preceding year of tax during which the housing rights to which those housing fringe benefits relate subsisted), as the case may be; and

(ii) in any other case - the statutory annual value for the purpose of calculating the taxable values of housing fringe benefits in relation to the employer in relation to the year of tax immediately preceding the current year of tax, being housing fringe benefits in respect of the recipients overall housing right or equivalent housing rights; and

B is the indexation factor in respect of the current year of tax in respect of the State or Territory in which the recipients unit of accommodation is situated.

26(3)    
For the purposes of the application of subsection (2) in relation to a housing fringe benefit in relation to an employer in relation to a year of tax (in this subsection referred to as the current year of tax ), the current year of tax is a base year of tax in relation to the recipients current housing right if:

(a) (Repealed by No 178 of 1999)

(aa)    

the employer elects that the current year of tax be treated as a base year of tax in relation to the recipients overall housing right or an equivalent housing right;

(b)    there was no housing fringe benefit, in relation to the employer in relation to the year of tax immediately preceding the current year of tax, in respect of the recipients overall housing right or in respect of an equivalent housing right; or

(c)    the following conditions are satisfied:

(i) in relation to each of the 9 years of tax immediately preceding the current year of tax there was a housing fringe benefit in relation to the employer in respect of the recipients overall housing right or an equivalent housing right;

(ii) none of those 9 years of tax was a base year of tax for the purpose of calculating the taxable value of a housing fringe benefit to which subparagraph (i) applies.

26(4)    
For the purposes of this section:

(a)    2 or more housing rights shall be taken to be included in the same class of housing rights if:

(i) the housing rights are in respect of the same unit of accommodation; and

(ii) the conditions (other than as to duration or consideration) of the housing rights are the same or substantially the same; and

(b)    a housing right shall be taken to be equivalent to another housing right if each of those housing rights is included in the same class of housing rights.

26(5)    
For the purposes of this section, where a material alteration to a unit of accommodation results in an increase or decrease of not less than 10% in the market value of the right to occupy or use the unit:

(a)    the unit of accommodation after the alteration shall be deemed to be a different unit of accommodation from the unit of accommodation before the alteration; and

(b)    if the alteration occurs during the subsistence of a housing right granted to a person in respect of the unit of accommodation, that housing right, as it subsists after the alteration, shall be deemed to have been granted to the person in respect of the unit of accommodation as it existed after the alteration and to have been so granted in the same circumstances as the first-mentioned housing right.

26(6)    
A reference in subsection (5) to a material alteration to a unit of accommodation is a reference to:

(a)    additions or improvements made to, or other work carried out in relation to;

(b)    any damage to; or

(c)    the addition of facilities to, or the removal of facilities from;

the unit of accommodation or any building, place or facility associated with the occupation or use of the unit of accommodation.

26(7)    

An election by an employer under paragraph (3)(aa) in relation to a year of tax:

(a)    shall be made by notice in writing to the Commissioner; and

(b)    shall be lodged with the Commissioner on or before the declaration date in relation to the year of tax.