If your usual place of residence is in an area classed as ‘remote’ by the Australian Tax Office and you are mortgaging that dwelling or unit under a formal mortgage contract then you can package up to 100% of your mortgage interest costs.

You will need to meet the following conditions in order to qualify for this benefit:

The dwelling/unit of accommodation that is your usual place of residence must be located in an area the ATO has designated as remote.
The mortgage must be provided by a commercial lending entity.
The mortgage must be held solely or jointly in your name – you cannot claim for loan interest where the loan is held solely in your spouse’s (or any other person’s) name.

Things you need to know

Like all salary packaged items, you can’t claim an income tax deduction on packaged items.
You can package 100% of your mortgage interest costs – Smartsalary will review your application and substantiation to ensure this is the case.
An FBT amount will be payable in relation to this benefit, and will be deducted from your pre-tax salary in accordance with the following formula:

FBT = Amount Reimbursed x 50% x 1.8868 x 47%

The Remote Area Mortgage Interest benefit cannot be set up on a recurring basis – you must submit one-off claims for the amounts you pay and you must specify the number of pays over which you wish to receive reimbursement.
In order to claim the benefit you must provide:
- A bank statement clearly showing the interest component of mortgage amounts paid or payable; or,
- A bank receipt clearly showing the interest component of mortgage amounts paid.
Because of the FBT cost associated with this benefit you are unlikely to derive any significant salary packaging savings from this benefit unless your annual taxable income exceeds $90,000.

How to start packaging Remote Area Mortgage Interest

Set up your mortgage agreement and get a mortgage agreement as a record of what you've paid and will pay.
Complete the Remote Area Mortgage Interest form from the Forms section of our website and send it to us with:

A bank statement clearly showing the interest component of mortgage amounts paid or payable; or
A bank receipt clearly showing the interest component of mortgage amounts paid.

If you’re not currently packaging with us we need to set you up in our system. Complete a Salary Packaging Application form and send it to Smartsalary along with your other documentation.

Each pay period we’ll get your employer to set aside 100% of your accommodation costs from your pre-tax salary, plus the FBT on 50% of those costs. We then arrange for that money to be transferred into your bank account. This way you don’t pay any income tax on 100% of what your accommodation costs you. You will however pay FBT on 50% of the amount.

Remote Area Benefits

See how much you can save.