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 which is 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. If you are unsure which zone you fit into or whether your residence is classed as being in a zoned area, you can easily check on the ATO’s current Australian Zone List
Zone tax offset 1st July 2015 changes
The eligibility criteria for the zone tax offset changed as of 1st July 2015. The tax offset used to be available for people who live OR work in remote zoned areas. This is no longer the case.
To be eligible for the zone tax offset from that date, 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.
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.
The ATO states:
“You may still be able to claim the tax offset, as long as your usual place of residence was in a zone for a continuous period of less than five years and:
- you were unable to claim in the first year because you lived there less than 183 days
- the total of the days you lived there in the first year and the current income year is 183 or more. The period you lived in a zone in the current income year must include the first day of the income year.”
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, but 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.