View Full Version : Changes to Housing Allowance
roostertail
24th Mar 2001, 11:34
Rumour has it that a rule change is in the pipeline that will mean that the Cathay housing allowance will soon be included in our salaries, with the effect being that it will be subject to tax. Has anyone got any information on that?
Surely if they try that on, then it will be a catalyst for a rather strong uprising?
Let's hope it's just a rumour, guys.
spannersatcx
24th Mar 2001, 13:10
I thought you were taxed on it anyway, in that your annual tax return was based on 110% of your earnings to take into account housing allowance. I could be wrong, I normally am!
Spanners you are half right. Normal rental assistance is taxed as you say. However, if you take the $24,000 basic level, as many commuters do, then you are taxed on the full $24,000. The change which is under consideration involves the home purchaser. Normally the allowance for this is not fully taxed but treated as rental assistance; you buy a house through a company and then lease the house to yourself. The change under consideration will treat the home purchase allowance as a mortgage payment refund instead of rental assistance. Thus the whole amount would then be taxable. This is currently the position that applies to home owners who bought in their own name and not through a company. CX believes they have to do this to comply with the IR ordinance. Many accountants do not agree with this CX assumption, however, anything that will further degrade our COS must be tempting to our personnel mismanagers.