Accommodation

Many dairy farms provide accommodation on or near the farm to attract people. Problems can arise if expectations about property care and vacating at the end of employment are not agreed clearly and in writing.

Accommodation is regulated by state residential tenancy laws, which set notice periods, bond rules, rent limits, repair and inspection rules, and tenancy-agreement terms. Breaching these laws can result in fines. Notice periods can be challenging when employment ends, particularly after summary dismissal for misconduct.

Do residential tenancy laws apply?

Whether residential tenancy laws apply depends on the state and on whether rent is charged or accommodation forms part of a pay package.

  • NSW, Tasmania, South Australia, Western Australia: laws do not apply if the accommodation is not provided for value — no rent is charged and it is not part of a package.
  • Queensland: laws apply whether or not rent is charged.
  • Victoria: laws do not apply if accommodation is part of an employment contract, and a tenancy agreement should not be used.

Bonds

If residential tenancy laws do not apply, a bond can still be charged. If the employee cannot pay upfront, they can pay by instalments each payday up to a reasonable amount. The bond must be returned at the end of the tenancy unless there is a valid reason to retain some or all of it, as set out in the agreement.

Watch out

Do not deduct a bond, or charges for property damage, from an employee's wages. This is not permitted under the Fair Work Act because it is not for the employee's benefit. The employee should instead pay from their take-home pay.

Rent and utilities

An employer and employee can agree to deduct rent or utilities (gas, electricity, water) from wages, because these are for the employee's benefit. Use an Authority to Deduct form to formalise the arrangement, and keep a signed copy with employment records.

Accommodation Agreement templates address common issues with on-farm housing. Because laws differ between states, there are separate templates for Victoria and for NSW, Tasmania, South Australia and Western Australia, plus shared-accommodation templates and a shared-housing code of conduct. There is no Queensland template, because tenancy laws apply to all accommodation there. (These are old-site resources, flagged for re-hosting.)

Charging rent in NSW, Tasmania, South Australia or Western Australia

To charge rent in these states, enter into a formal residential tenancy agreement under state law. Many farmers use a local real estate agent to prepare the agreement, manage the property and carry out inspections. Each state's tenancy authority provides information and standard templates:

Watch out

If an employee takes long service leave and the property is needed for other employees, the value of the accommodation must be paid to that employee. Check the long service leave rules for the relevant state.

Accommodation and Fringe Benefits Tax

Providing accommodation may attract Fringe Benefits Tax (FBT). However, a 'remote area housing benefit' can be exempt, and many dairy farms qualify. Two tests apply: the farm must be in a 'remote area' (a location-based test), and the accommodation must be 'necessary' — which is generally met where it is customary in the industry to provide housing, or suitable housing is otherwise unavailable nearby.

If a remote-area housing exemption does not apply, a 50% reduction in the taxable value may still be available (for example, remote-area rent assistance). The rules are detailed and depend on each farm's location, so confirm eligibility with an accountant. See the ATO's remote area FBT concessions for the current tests.

Tip

This is general information, not advice. Consult a tax, legal or accounting adviser before relying on an FBT exemption or concession.

Common questions

Do residential tenancy laws apply to farm accommodation?

It depends on the state. In NSW, Tasmania, SA and WA they do not apply if no rent is charged and the accommodation is not part of a package. In Queensland they always apply. In Victoria they do not apply if the accommodation is part of an employment contract.

Can I deduct rent or utilities from an employee's wages?

Yes, if the employee agrees, because rent and utilities are for their benefit. Use a signed Authority to Deduct form and keep it with employment records.

Can I deduct a bond or damage costs from wages?

No. The Fair Work Act does not permit deducting a bond or damage charges from wages, because they are not for the employee's benefit. The employee should pay from their take-home pay.

Is farm accommodation subject to Fringe Benefits Tax?

It can be, but a remote area housing benefit is often exempt, and many dairy farms qualify. If not, a 50% reduction may apply. Confirm eligibility with an accountant, as the tests depend on the farm's location.