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Moving to the country? You could enjoy the Remote Area Benefit.

If you’re making the move to a remote area or country region, you could be enjoying more than just fresh air. The pivot to permanent and flexible working arrangements driven by the pandemic has caused an exodus of city dwellers seeking the good life. The Commonwealth Government offers some tax incentives for people and businesses to live and work in Remote Areas, known as Remote Area Benefits.

The idea behind these benefits is to assist employers in rural and remote areas to attract and retain staff. While the concessions were originally designed to attract more people to work in remote regions rather than seeking fortunes in cities and towns, current trends are seeing people happily head back to literal greener pastures. Because many employees have found themselves able to work remotely, there has been an influx of people populating regional locations. This has caused higher demand for property across the country resulting in higher house prices, giving even more reason for those eligible to take advantage of Remote Area Benefits.

remote area benefit

How do Remote Area Benefits work?

If you live and work within a remote area as defined by the ATO, you could be eligible to salary package for either rent, or interest on your mortgage repayments, plus your gas and electricity bills with your pre-tax dollars. Only 50% of the value of the remote area benefits are taxable, allowing eligible employees to effectively increase the amount of their take home pay. Any Remote Area benefits made from pre-tax salary reduces the amount of tax applied to your take-home pay, so it is financially win-win.

The exact Remote Area Benefits you can claim vary depending on location, so be sure to check with your employer. All Remote Area Benefits are non-reportable benefits and won’t appear on your annual PAYG payment summary and can be in addition to any other salary packaging arrangement you already enjoy. Collectively known as Remote Area Benefits, the items that can be included are Mortgage Interest or Rental Payments, Housing Purchase Expenses, Relocation Costs and Holiday Travel.

Remote Area Mortgage Interest

If you’re eligible, you might already enjoy saving on mortgage repayments with salary packaging. This lets you save even more. If you have a mortgage on your home and your workplace is in a remote area, and that home is also your primary place of residence, you can salary package more than only your mortgage repayments.

Because 50% of the interest amount is treated as an Exempt Benefit, 50% of your interest is deducted from your pre-tax salary. For example, Amy works in the not-for-profit sector and lives and works in a remote area and has a mortgage on a property that is Amy’s primary place of residence. Amy sends through the annual mortgage statement and the total interest paid was $15,700. For the Fringe Benefits Tax (FBT) year (1 April to 31 March), Amy can salary package $7,850 from pre-tax salary as a remote benefit and the other 50% can be part of the eligible Cap. This means Amy is able to salary package other expenses, thereby maximising the eligible entitlements.

salary packaging geelong

Remote Area Housing Purchase

There aren’t many ways to save on a house purchase, so make the most of this one if you’re eligible. You can salary package the costs associated with buying land or a house and land in a remote location. Once again, as long as the land or house and land will become your primary place of residence and the construction of the home is completed, 50% of your purchase costs is treated as an Exempt Benefit, so 50% of your purchase costs can be deducted from your pre-tax salary.

Remote Area Rental Payments

No one enjoys paying rent, but Remote Area Benefits will certainly take the sting out. If you pay rent on your home and your workplace is in a remote area, and that house is your primary place of residence, you can salary package 50% of the amount of rent you pay from your pre-tax salary. For example, Peter pays $8,200 in rent every year, therefore 50% of the rent amount can be salary packaged from pre-tax. But, as with Remote Area Mortgage Interest, Peter can also salary package more to an eligible Cap for other benefits.

Remote Area Holiday Travel

If you are moving to a remote region, you’ll potentially find yourself a long way from other family members and friends. This benefit is designed especially so you can salary package the cost of travel from your remote location to the nearest capital city and help you stay in touch.

This is available to eligible employees and their immediate family such as a spouse or partner, even if you do not accompany them on the holiday. For example, your children may go and stay with their grandparents for a week while you and your partner stay at your property. You can salary package the children’s travel expenses if they take any form of remote transport. Plus, if some of your immediate family members do not live with you at your remote location, you can also use this benefit to pay for their travel to meet you.

The Remote Area Holiday Travel requires that the holiday is for three or more working days and the travel is within Australia to major population centres. The claimable expenses can include:

  • Air Fares
  • En route meals & accommodation
  • Hire car and hire car costs to the destination
  • Costs associated with transport to the holiday location inc. own car expenses

Costs incurred at the destination, such as meals, accommodation and car hire are not eligible.

Remote Area Residential Fuel

Most Australian households are currently experiencing more bill shock than ever before. But, as long as you are already salary packaging one of the above Remote Area Housing Benefits, you could be saving on household fuel or energy such as gas, electricity and firewood (not motor vehicles). Because 50% of your fuel cost is treated as an Exempt Benefit, 50% of your fuel costs can be deducted from your pre-tax salary. While this doesn’t apply to motor vehicle fuel, you could always consider novated leasing as a clever way to save on your overall car running and maintenance costs.

remote area residential fuel

What qualifies as remote living?

To qualify, you need to work for an employer and have your primary place of residence located more than 40 kilometres from a town of 14,000 people, or more and more than 100 kilometres from a town of 130,000 people. You must also live in the property as your main residence. Your employer must also be in a remote location as defined by the ATO. To put that into a Victorian perspective, you would need to be located more than 40 kilometres from a major Australian town or city such as Ballarat, Bendigo, Warrnambool, Shepparton, Wangaratta or Albury etc. For the full eligibility criteria, check the ATO website here.

Ask us how much you can save on Remote Area Benefits

As Victoria and Geelong’s premier regional salary packaging services provider, we’ve helped employees across the state access Remote Area Benefits. If you believe you are eligible, or you are an eligible employer who wants to attract and retain staff, we can step you through the process of applying for Remote Area Benefits. Get in touch with us here or call 03 5229 4200.