By taxconnect on
Tuesday, December 20, 2011
** Note: Budget changes to limit to 12 months - see budget 2013 announcement ***
LAFH concessions provide tax-free benefits for housing and food costs of employees who are required to live away from home temporarily in order to perform their employment duties. From 1 July 2012, the Government is seeking to reform the rules by moving the current rules in the Fringe Benefits Tax (FBT) regime to the Income Tax regime.
LAFH allowances will only be accessible where the amounts are substantiated and where the temporary resident is living away from a maintained Australian home that is for their own use. This is similar to the rules applying to Australian employees. From 1 July 2012, temporary residents will be subject to personal taxation on these LAFH payments where they do not maintain an Australian home, effectively reducing their take home pay.