Issued
2009

Drop in FBT rate for low-interest loans

2009 Order in Council drops the prescribed rate used to calculate fringe benefit tax on low-interest, employment-related loans to 8.05%, down from 10.90%.

The prescribed rate used to calculate fringe benefit tax on low-interest, employment-related loans has dropped to 8.05%, down from the 10.90% rate which has applied since 1 October 2008.

The rate will apply retrospectively from 1 January 2009. This is because when this rate is lowered, the new rate applies from the start of the current quarter.

The rate is reviewed regularly to align it with the results of the Reserve Bank's survey of first home mortgage interest rates.

The new rate was set by Order in Council on 2 February 2009.

Income Tax (Fringe Benefit Tax, Interest on Loans) Amendment Regulations 2009 (SR 2009/8)