Fringe Benefits Tax (FBT) concessions are at the heart of salary packaging. Understanding them at a high level helps you make better decisions about using your benefits for your home.
What are FBT caps?
Certain NFP employers receive FBT exemptions or rebates on benefits they provide to employees, within specified annual limits or “caps”.
Within those caps, benefits such as mortgage or rent, credit card payments and other living expenses can be provided in a tax effective way.
Where mortgage and rent fit in
For eligible employees, housing costs like:
- Mortgage repayments on your principal place of residence.
- Rent on the home you live in.
can be treated as part of the living expense component of your package, up to the allowable cap.
Choosing what to package first
You may have options around packaging:
- Mortgage or rent.
- Other bills and living expenses.
- Novated lease and vehicle running costs.
The right combination depends on your income, caps, debts and goals. This is where advice from a tax professional is important, and where Iconic can show how different choices might interact with your home loan strategy.
Working with Iconic and your advisers
Iconic Mortgage Solutions:
- Respects that tax advice that comes from your accountant or packaging provider.
- Focuses on designing the loan and payment structure that fits with the advice you have received.
- Helps you implement the plan with lenders who understand this environment.
“Confused about how FBT caps and your mortgage fit together? Talk to Iconic about an NFP focused home loan review in collaboration with your tax adviser.”