Loans on a 457

Echo Echo

We had never even heard of the LAFHA and dont have it on our 457. Stamp duty for buying a house on a 457 does apply in WA but other states I believe are different.

Janette

[Johnthepom]

Thanks for clearing that up guys, just wish i'd known about it 12 months ago when I was negotiating my contract/salary.

c'est la vie.

John

[AndrewL]

Originally Posted by BullcreekBob

Sorry John, but you're wrong on a number of issues.

There is no such thing as "qualifying" for a LAFHA, either you negotiated one with your sponsor before you signed a contract, or you didn't. Once you've signed up, it's probably too late to change any details. The LAFHA is not a concession given by the taxman, it is an allowance given to you by your employer. Just because an employer may chose to pay you a LAFHA does not relieve the employer of their obligation to pay you the minimum wage specified by law. For many employers there is no reason to offer a LAFHA to potential employees, it is administratively a pain in the butt and why pay more than you have too?

Of course some people with uncommon skills are worth more and their employers are happy to pay extra and go to extra effort, however you will need to negotiate that first, before signing on and before arriving here.



As a temporary resident, you will not be required to declare overseas income in your Aussie tax returns. You might need to declare your Aussie income to the UK taxman along with your other UK income - but I'm not a UK tax expert.



No.

He will be able to still get LAFH benefits even if not stated in his contract. It is not burdensome for payroll to put through so he should be okay.

With respect to it being something you don't qualify for, that's not quite right. You do have to qualify for it and, then, you need to have a company will to put it through. But as it's exempt from FBT anyway, there is no cost to the company.

I hope this helps.

[Johnthepom]

Cheers guys,

Shortly after starting work I spoke to the commercial guru and he has changed my package to include the LAFHA which confirms AndrewL's advice.

From what I can gather, it is aimed at people on a temporary contract (e.g. a 457 visa) and who retain a home in their home country. The logic being that you leave behind liabilities in your old country and thus you are given tax relief on the additional costs of living in a second country.

The minute you make any attempt to become a permanent resident in Australia, you lose the allowance, hence if you buy a property or apply for a permanent residency, you will lose the allowance.

I also understand there is no time limit on claiming it so for anyone out there with a home in the UK (or elsewhere persumably) and renting in Australia, it has to be worth a try.

Cheers
John

[AndrewL]

Generally speaking, you can only receive LAFH benefits for four years, although I have seen five years on occasions.

[BullcreekBob]

Originally Posted by AndrewL

Generally speaking, you can only receive LAFH benefits for four years, although I have seen five years on occasions.

Technically speaking, you are "elligible" to negotiate a LAFHA with your employer for as long as your are living away from home.

For people who come on a temporary 4 year visa but after three years change to a new employer with another 4 year 457 temporary visa, they could be paid a LAFHA for the whole 7 years.

If at any stage you buy a house here, or create a "home" then technically you are no longer living away from home. In such a situation the ATO could decide that you are not eligible for a LAFHA and tax you on the amount so paid. In most practical senses however, the ATO will not know about your home situation so things will be at the discretion of your employer.

[AndrewL]

Originally Posted by BullcreekBob

Technically speaking, you are "elligible" to negotiate a LAFHA with your employer for as long as your are living away from home.

For people who come on a temporary 4 year visa but after three years change to a new employer with another 4 year 457 temporary visa, they could be paid a LAFHA for the whole 7 years.

If at any stage you buy a house here, or create a "home" then technically you are no longer living away from home. In such a situation the ATO could decide that you are not eligible for a LAFHA and tax you on the amount so paid. In most practical senses however, the ATO will not know about your home situation so things will be at the discretion of your employer.

Sorry, but you can't claim LAFH for generally greater than 4 years, ie the maximun duration of a 457 visa. The 5th year is an exception, after this proving LAFH is very, very difficult.

You also do not note that individuals must complete a LAFH declaration each year, so either you lie or...well... :-)

You can also have an inputed rent value if you can still prove you are LAFH, ie after a house purchase.

[snarky]

It would be even easier with an international bank like barclays!

Jay
poor credit loans

[MMN]

Hi Guys

maybe you have got the answers now, or maybe even more questions.......... Anything that you haven't found out about can be directed to mandy.dickerson@mortgagechoice.com.au She deals with new immigrants and mortgages and all the criteria behind visas and employment

Give it a go !

Maria

[Coffee]

Originally Posted by Johnthepom

From what I can gather, it is aimed at people on a temporary contract (e.g. a 457 visa) and who retain a home in their home country.

It's actually not restricted to owning a home in your home country but to "maintain ties with your home country". That can be in form of a bank account, shares, a pension scheme, life insurance, family etc. The application will be reviewed and the stronger the ties the more likely that you will qualify (i.e. a house is possibly the strongest argument).

And it makes renting surprisingly affordable...