What is a zone tax offset?
The zone tax offset is a tax concession offset offered by the Australian Tax Office for people who live in remote areas of Australia.
This offset is to assist with the higher cost of living, amenities and other environmental factors associated with remote living. The zone tax offset provides significant tax savings to eligible Australian taxpayers.
Who can claim the Zone Tax Offset?
If you live in a remote area defined by the government as a ‘Zoned Area’ (Zone A, Zone B or Special Area) you may be entitled to claim the zone tax offset. Unsure which zone you fit into or whether your residence is classed as being in a zoned area? Check on the ATO’s current Australian Zone List
To be eligible for the zone tax offset your usual place of residence throughout the year must be in a zoned region. Eligibility no longer includes those who work but don’t live in a zoned area.
As a consequence the ATO has advised that fly-in-fly-out workers are now not eligible to claim the offset unless their usual place of residence is also zoned.
To qualify for the zone tax offset when you live in a remote area, you also need to meet the following criteria:
You must reside in an area classed as a remote area by the ATO for either:
- 183 days or more during 2019–20, or
- 183 days or more during the period 1 July 2018 – 30 June 2020 (including at least one day in this financial year)
- you must not have claimed a zone tax offset in your 2018–19 tax return.
Eligibility below the 183 day threshold
In some cases, you could still be eligible for the zone tax offset if you lived in a zoned region for less than 183 days of the year. However, you need to meet ALL of the following three conditions:
- you lived in a zone for a continuous period of less than five years after 1 July 2014
- the total of the days you were there in the first year and in 2019–20 is 183 or more
- you could not claim a zone tax offset in that first year because you were there less than 183 days.
How much can I claim?
The amount you can claim varies dependent on whether you have dependents but the current single person annual rates are:
- Zone A offset value is $338
- Zone B offset value is $57
- Special zone areas offset value is $1,173
For help with eligibility and the amount you can claim, simply contact your Etax Accountant.
Australian Defence Force Personnel
If you’re a member of the Australian Defence Force, it is possible that you could qualify to receive the Overseas Forces Offset or even an Overseas Forces Tax Exemption. You can qualify for both the zone offset and the overseas forces offset. However, ATO regulations stipulate that you can only claim one offset. Therefore we recommend you claim whichever offset is highest. For further information about overseas offsets for Defence Force members, please visit our Overseas Forces Tax Offset blog post.
Not sure whether you’re eligible or how much you can claim?
If you’re unsure of how to claim either the zone tax offset or the overseas forces tax offset, please contact us on [email protected]
If you’d prefer, while logged into your tax return at Etax.com.au, send your accountant a message directly by using the ‘my messages’ feature at the top of the screen. They’ll quickly be able to tell you.
Please note: The information contained in this post is sourced and/or quoted from the ATO website.