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WHAT IS A HOUSING FRINGE BENEFIT? WHAT ARE THE TAXABLE VALUE OF A HOUSING FRINGE BENEFIT PROVIDED IN AUSTRALIA?

A housing fringe benefit occurs when an employee is provided with a house by his/her employer and is provided the right to use the unit as his/her common place of residence. If an individual also shares the space, then it will also be considered under the housing fringe benefits. The place of accommodation may include –

• a house, flat or home unit;
• accommodation in a hotel, motel, guesthouse, bunkhouse or other living quarters;
• a caravan or mobile home;
• accommodation in a ship or other floating structure.

Nevertheless, if the unit of accommodation is not used as the usual place of residence then the right to use the unit is not a housing fringe benefit, rather it may give rise to a residual fringe benefit.
There are two sub-categories of these benefits for tax valuation purposes. These are:

•  Accommodation in a caravan, mobile home, hotel, motel, hostel or guesthouse where the person providing the benefit is carrying on a business of providing such accommodation to the public. The taxable value is 75% of the market rental value of the accommodation, additionally; any rent paid by the employee is reduced from this value. This value must be calculated by referring the FBT year when the employee had the right to use the accommodation.
• For other accommodations, taxable value follows the statutory annual value which is the annualised market value at the date of last evaluation; if any rent is paid by the employee, then that rental payment should be deducted from the market value. Inflation is adjusted in this value. This period can be used for up to 9 years.