Issue
Whether the term "in respect of accommodation" contained in paragraph 21(b) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA) includes the reimbursement or payment by the employer of mortgage expenses in respect of a house purchased by an employee and used as a dwelling by the employee and members of the employee's family while they are temporarily residing in Australia?
Decision
No. The term "in respect of accommodation" contained in paragraph 21(b) of the FBTAA does not include the reimbursement or payment by the employer of mortgage expenses in respect of a house purchased by an employee and used as a dwelling by the employee and members of the employee's family while they are temporarily residing in Australia.
Facts
The employee and members of the employee's family arrived in Australia on a prearranged 3-year to 4-year employment assignment.
The intention of the employer and the employee is that the employee will only remain in Australia for the anticipated duration of the assignment, which is not expected to exceed four years.
But for the assignment in Australia, the employee would not have established a residence in Australia and would have continued to reside overseas.
The employee will continue to maintain an overseas residence which will be let during the duration of the employee's assignment in Australia.
The employee would prefer to purchase a house in which to live while temporarily residing in Australia.
The employee would have leased a property instead of purchasing a house if a suitable rental property had been available.
The employer proposes to compensate the employee by way of reimbursement for mortgage expenditure incurred by the employee.
Reasons for Decision
The expenditure which is reimbursed or paid by the employer is considered to be expenditure in respect of a mortgage connected with the acquisition of a house. It is not considered to be "in respect of accommodation" for the purposes of paragraph 21(b) of the FBTAA. Accordingly, the expense payment benefit is not an exempt accommodation expense payment benefit under section 21 of the FBTAA.
Amendment History
Date of Amendment Part Comment 23 January 2026 Throughout Updated for minor style changes 23 January 2026 Business line Updated to Superannuation and Employer Obligations
Date of Amendment | Part | Comment
23 January 2026 | Throughout | Updated for minor style changes
23 January 2026 | Business line | Updated to Superannuation and Employer Obligations