Home Office Costs

Many people have roles where they are able or required to work from home at times. This isn’t generally something that your employer reimburses you for but you are able to deduct a proportion of some of your household costs as a deduction against your assessable income. There are a number of rules surrounding this so it doesn’t give you carte blanche to deduct costs as you see fit and the two primary things to take into consideration are outlined below

 

  • Are you running a business from home or are you undertaking some of your duties for your employer?
  • Do you have a dedicated work area that you use exclusively for work use?

 

First lets look at the costs you can claim if your work from home isn’t due to it being your principal place of business

 

  • You can claim a portion of utilities whether you have a dedicated space or not
  • You can claim work related phone costs whether you have a dedicated space or not
  • You can claim for the depreciation of office type plant and equipment whether you have a dedicated space or not
  • You can only claim for the depreciation value of curtain and carpets etc if you have a dedicated space and these items form part of that space
  • You cannot claim items such as rent, mortgage interest, insurance and rates whether you have a dedicated space or not

 

One thing to be aware of is that if you do claim occupancy expenses such as mortgage interest you could end up with a capital gain issue to deal with at a later date

 

If you are running your business from home the deductions you can generally claim are as follows

 

  • Cost of utilities, on an actual usage basis of apportionment between business and personal
  • Business telephone costs if you have a phone purely dedicated to the business. If the phone is used for both you can only claim for business calls
  • Depreciation of office plant and equipment apportioned between business and private usage
  • Occupancy expenses can be claimed for the proportion of the property that is being used for business use (be aware of capital gain issues)

 

For more detail speak with your tax advisor in order to ensure that your claim is accurate.