Internal Revenue Service Provides 2019 Foreign Housing Amounts

Apr 05 2019
Published in: Public Policy
| Updated Apr 27 2023

In a Notice issued March 28, 2019, the U.S. Internal Revenue Service (IRS) provided adjusted foreign housing amounts for 2019 for a long list of locations around the world. (See The annual notice lets taxpayers exclude higher housing amounts in high-cost areas.

Under section 911 of the U.S. tax code, qualifying workers abroad may elect to exclude from U.S. income reimbursements and payments for foreign housing, up to a limit. The limit is computed by first establishing a maximum allowable housing cost, and then subtracting from that a “base housing amount.” For 2019, the maximum housing expense amount is $31,770 and the base housing amount is $16,944. Consequently, absent any adjustment, the largest amount excludable for foreign housing in 2019 is $14,826.

However, the law gives the IRS authority to adjust the maximum housing cost upward for locations in which housing is more expensive. The IRS has done so every year for a number of years and Notice 2019-24 provides the allowable costs for 2019 in dozens of cities and areas around the world. As is usual, a few very high-cost locations stand out: Hong Kong leads the list at $114,300, followed by Moscow at $108,000. Other notable high-cost cities include Tokyo at $93,200, Paris at $71,800, and Milan at $71,500.

As it has also done in prior years, the IRS provides an option to use the 2019 amounts for 2018 if they are higher.

How This Impacts Mobility

Companies with employees living abroad save money to the extent the employees are able to exclude foreign housing costs from U.S. income. The new list of heightened amounts for 2019 will allow for additional savings, and companies should also examine whether the 2019 amounts are higher than the 2018 amounts in any locations in which they had employees in 2018, and apply the higher amounts, although that might require amended returns for some employees.