Private ruling: Housing fringe benefit
Date of advice: 18 February 2026
Published: 7 April 2026
Ruling period: Fringe Benefits Tax (FBT) Year Ended 31 March 20XX | FBT Year Ending 31 March 20XX | FBT Year Ending 31 March 20XX | FBT Year Ending 31 March 20XX
Date scheme commenced: 1 April 20XX

Ruling: Q1: Will the provision by the Employer of accommodation to the Employees constitute a 'housing fringe benefit' as defined in subsection 136(1) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)? | A1: Yes.

Relevant facts and circumstances: The Employer is a school which is a charity registered with the Australian Charities and Not for Profit Commission. Its objects are for the purposes of advancing education. It is endorsed for the tax concessions including the Income Tax exemption, Goods and Services Tax (GST) concessions and FBT rebate. The Employer provides two employees with residential accommodation which is located on a site directly adjacent to the school. The housing provided to each employee is described as a three-bedroom townhouse. The townhouses are adjoined to each other. The two employees reside in the accommodation with their respective family members; they have no other residential accommodation available to them. The title to the residential accommodation is owned outright by the Employer; it is not leased. The accommodation is imposed on the employees as part of their duties, specifically it is a requirement of their engagement that they reside in the accommodation. The proximity of the accommodation to the school is necessary for each employee's job demands. Employee 1 often works late hours and regularly attends after hour school functions such as parent meetings, concerts, committee & board meetings etc. Employee 2 is required to be available at all times, both day and night, for the student boarders who live nearby in a boarding house owned by the Employer. The accommodation is not provided as part of a remuneration package, but as a necessary incident of running the school i.e. to have a responsible person on site, providing pastoral care and for both employees to properly conduct their duties. The employees are not required to make any post tax monetary contributions in relation to the provision of accommodation. The employees' salaries would not be increased if the residential accommodation was not imposed on these individuals. The accommodation is not that of remote housing.

Relevant legislative provisions: Fringe Benefits Tax Assessment Act 1986 section 25 | Fringe Benefits Tax Assessment Act 1986 subsection 136(1)

Reasons for decision: Summary: The provision by the Employer of accommodation to the Employee constitutes a 'housing fringe benefit' as defined in subsection 136(1) of the FBTAA. | Detailed Reasoning - Detailed reasoning: Subsection 136(1) of the FBTAA defines a 'housing fringe benefit' to mean a fringe benefit that is a housing benefit . The meaning of a 'fringe benefit' and a 'housing benefit' are considered separately below. A 'fringe benefit' is defined in subsection 136(1) of the FBTAA, which holds that the following conditions must be satisfied: 1. A benefit is provided at any time during the year of tax. 2. The benefit is provided to an employee or an associate of the employee. 3. The benefit is provided by: (a) their employer; or (b) an associate of the employer; or (c) a third party other than the employer or an associate under an arrangement between the employer or associate of the employer and the third party; or (d) a third party other than the employer or an associate of the employer, if the employer or an associate of the employer: (i) participates in or facilitates the provision or receipt of the benefit; or (ii) participates in, facilitates or promotes a scheme or plan involving the provision of the benefit; and the employer or associate knows, or ought reasonably to know, that the employer or associate is doing so; 4. The benefit is provided in respect of the employment of the employee. 5. The benefit is not one that is specifically excluded as per paragraphs (f) to (s) of the definition of a fringe benefit in subsection 136(1) of the FBTAA. In order to determine whether the provision by the Employer of the accommodation to the Employees constitutes a 'fringe benefit' as defined in subsection 136(1) of the FBTAA, a discussion is provided below in respect of whether each element or condition of the definition of a 'fringe benefit' is satisfied. | Detailed Reasoning - Is a benefit provided?: Subsection 136(1) of the FBTAA provides a broad definition of a 'benefit' as including: any right (including a right in relation to, and an interest in, real or personal property), privilege, service or facility and, without limiting the generality of the foregoing, includes a right, benefit, privilege, service or facility that is, or is to be, provided under: (a) an arrangement for or in relation to: (i) the performance of work (including work of a professional nature), whether with or without the provision of property;... The definitions of 'provide' and 'provider' in subsection 136(1) of the FBTAA are as follows: | Detailed Reasoning - provide:: (a) in relation to a benefit - includes allow, confer, give, grant or perform; and (b) ... provider, in relation to a benefit, means the person who provides the benefit. The Employee was granted the use of the accommodation by the Employer under an arrangement for or in relation to the performance of the Employee's work. This constitutes the provision of a 'benefit' as defined in subsection 136(1) of the FBTAA. | Detailed Reasoning - Is a benefit provided to an employee or an associate of the employee?: An 'employee' is defined in subsection 136(1) of the FBTAA to mean a current, future or former employee. Subsection 136(1) defines a 'current employee' to mean a person who receives, or is entitled to receive, salary or wages. 'Salary or wages', as defined in subsection 136(1) of the FBTAA, means payments from which an amount must be withheld under section 12-35 of Schedule 1 to the Taxation Administration Act 1953 (TAA). The Employees are paid salary or wages from which an amount is withheld by the Employer under section 12-35 of Schedule 1 to the TAA. The Employee is therefore considered to be a 'current employee' of the Employer as that term is defined in subsection 136(1) of the FBTAA. | Detailed Reasoning - Is the benefit provided by an employer, an associate of the employer or a third party?: The term 'employer' is defined in subsection 136(1) of the FBTAA to mean a current, future or former employer. Subsection 136(1) of the FBTAA defines a 'current employer' to mean a person who pays, or is liable to pay, salary or wages.The Employer pays salary or wages to the Employees and thus meets the definition of an 'employer' in subsection 136(1) of the FBTAA. Therefore, as the benefit is provided by the Employer (the Employee's employer), this condition is satisfied. | Detailed Reasoning - Is the benefit provided in respect of employment?: As per subsection 136(1) of the FBTAA, the term 'in respect of' - in relation to the employment of an employee - includes by reason of, by virtue of, or for or in relation directly or indirectly to, that employment. Subsection 148(1) of the FBTAA stipulates that a benefit will be provided in respect of the employment of an employee: • whether or not the benefit also relates to some other matter or thing • whether the employment is past, present or future • whether or not the benefit is surplus to the recipient's requirements • whether or not the benefit is also provided to another person • whether or not the benefit is offset by any inconvenience or disadvantage • whether or not the benefit is provided or used, or required to be provided or used, in connection with any employment • whether or not the provision of the benefit is in the nature of income, and • whether or not the benefit is provided as a reward for services rendered, or to be rendered, by the employee. In J & G Knowles & Associates Pty Ltd v Federal Commissioner of Taxation (2000) 96 FCR 402; 2000 ATC 4151; (2000) 44 ATR 22 ( Knowles ), the full Federal Court - in examining the meaning of 'in respect of' an employee's employment - held that the phrase required a 'nexus, some discernible and rational link, between the benefit and employment', though noted that 'what must be established is whether there is a sufficient or material, rather than a causal, connection or relationship between the benefit and the employment'. A similar view was also held in Essenbourne Pty Ltd v FC of T 2002 ATC 5201 and Starrim Pty Ltd v FCT (2000) 102 FCR 194; [2000] FCA 952; 2000 ATC 4460; (2000) 44 ATR 487. The full Federal Court in Knowles also suggested that it would be useful to ask 'whether the benefit is a product or incident of the employment'. To establish whether a sufficient or material connection exists between the provision of the accomodation adjacent to the school and the employment of the Employees, it is necessary to consider the circumstances in which it has been provided. The Employees have been provided with accommodation which allows the Employees to conduct their employment duties - that is, to provide education to student boarders who live nearby, as well as attend after hour school functions such as parent meetings, concerts, committee and board meetings. If it were not for the employment relationship between the Employer and the Employees, where the Employees were involved in the day-to-day operation of the running of the school, the Employees would not have received the benefit. Therefore, the connection between the benefit received by the Employees and the Employee's employment is material and sufficient, and not merely causal. On the basis of the above discussion, the benefit (that is, the right to use the accommodation adjacent to the school) provided to the Employee by the Employer would be considered to be 'in respect of the employee's employment'. As such, this condition is satisfied. | Detailed Reasoning - Is the benefit excluded from the definition of a fringe benefit?: With respect to paragraphs (f) to (s) of the definition of a 'fringe benefit' in subsection 136(1) of the FBTAA, the relevant paragraph to consider is paragraph (g) which provides that an exempt benefit will not be a fringe benefit. In considering whether the accommodation provided by the Employer to the Employees falls within any of the exempt benefits listed in Part III of the FBTAA, it is necessary to initially determine the types of fringe benefits that may be applicable under the FBTAA. In the present circumstances, the relevant benefit is considered to be a 'housing benefit'. | Detailed Reasoning - Housing Benefit: A 'housing benefit' is defined in subsection 136(1) of the FBTAA as meaning a benefit referred to in section 25 of the FBTAA. Under section 25 of the FBTAA, a 'housing benefit' will arise where a person grants a 'housing right' to another person, as follows: The subsistence during the whole or a part of a year of tax of a housing right granted by a person (in this section referred to as the provider ) to another person (referred to in this section as the recipient ) shall be taken to constitute a benefit provided by the provider to the recipient in respect of the year of tax. A 'housing right' is defined in subsection 136(1) of the FBTAA as meaning a lease or licence being granted to a person to occupy or use a unit of accommodation as that person's current usual place of residence: housing right, in relation to a person, means a lease or licence granted to the person to occupy or use a unit of accommodation, insofar as that lease or licence subsists at a time when the unit of accommodation is the person's usual place of residence. A 'unit of accommodation' is defined in subsection 136(1) of the FBTAA as including a house, flat or home unit, accommodation in a hotel, hostel, motel or guesthouse, accommodation in a bunkhouse or other living quarters, accommodation in a ship, vessel or floating structure, and a caravan or mobile home. Having regard to each of the above definitions, the Commissioner considers that, in the current circumstances: • the type of accommodation adjacent to the school falls within the definition of a 'unit of accommodation' as defined in subsection 136(1) of the FBTAA • as per the Facts, there is a title to the residential accommodation, and it is owned outright by the Employer, who then provides the Employees the right to occupy or use the house and it is considered the Employees usual place of residence. As such, a 'housing right' as defined in subsection 136(1) of the FBTAA is provided by the Employer to the Employee, and • on the basis it is considered that a 'housing right' is provided by the Employer to the Employees, the definition of a 'housing benefit' in turn is also satisfied as per the definition of that term in section 25 and subsection 136(1) of the FBTAA. As such, it is concluded that a 'housing benefit' is provided by the Employer to the Employee. Having established that the relevant benefit that would apply in the current circumstances is a 'housing benefit', the only exempt benefit listed in Part III of the FBTAA that is of relevance is a 'remote area housing benefit' under section 58ZC of the FBTAA. However, as the Australian Taxation Office (ATO) does not consider the location of the school to be a 'remote area', this exempt benefit is not applicable in the current circumstances. There are no other exemptions for housing benefits under which the benefit could qualify. Therefore, the accommodation benefit provided by the Employer to the Employee is not specifically excluded from the definition of a 'fringe benefit'. This means that the fifth condition (i.e. the benefit provided is not specifically excluded from the definition of a fringe benefit) is satisfied. As all of the above conditions in the definition of a 'fringe benefit' are satisfied, the benefit provided to the Employees constitutes a 'fringe benefit' as per the definition of that term in subsection 136(1) of the FBTAA. It has also been established above that the benefit provided to the Employees constitutes a 'housing benefit' as defined in subsection 136(1) of the FBTAA. As such, given the benefit provided to the Employee is both a 'fringe benefit' and a 'housing benefit', the provision by the Employer of accommodation to the Employees constitutes a 'housing fringe benefit' as defined in subsection 136(1) of the FBTAA.

Reasons for decision: These reasons for decision accompany the Notice of private ruling . | This is to explain how we reached our decision. This is not part of the private ruling. | Question: Will the provision by the Employer of accommodation to the Employee constitute a 'housing fringe benefit' as defined in subsection 136(1) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)?