Tax considerations if you work from home
The information in this article will be relevant to you if you work from home but your home is not your principal place of business.
Whether or not you can claim deductions relating to the area of your home you use wil depend on which of the following categories you fall into:
- Your principal place of business is not your home but you have a dedicated work area like a study that is set aside primarily for work activities
- Your principal place of business is not your home and you do not have a room or area set aside primarily for work, but you do carry out some work at home – for example in the lounge room on weekends.
The table below sets out which deductions you may be able to claim if you fall into one of the two categories above and your home is not your principal place of business.
|Deductions you may be eligible to claim||If you do have a work room or area||If you don’t have a work room or area|
|Utilities like electricity and gas for a room||Yes||Yes|
|Phone costs related to work||Yes||Yes|
|Depreciation (decrease in value) of relevant equipment like computers and desks||Yes||Yes|
|Depreciation (decrease in value) of fittings and floor and window coverings||Yes||No|
|Expenses related to occupancy like rent, mortgage payments and rates||No||No|
Implications for capital gains tax
If you own your home and are entitled to the exemption from capital gains tax for main residences, this will not be affected by you falling into one of the two categories outline above (your home is not your principal place of business and you do or don’t have an area dedicated to it). The situation may be different, however, if your home is your principal place of business.