| 02 9982 2466

Home-based business expenses

Over the last few years, there has been a significant increase in the number of home-based businesses starting up in Australia.

While working from home can help improve a person’s work and life balance, when it comes to claiming home expenses for these business owners, there are a multitude of factors that need to be considered. There are two types of house expenses home-based business owners can claim:

For home-based business owners to be able to claim occupancy costs, the house that they run their business in must be clearly identifiable as the place of business, and include an area that is specifically allocated for the business. Business signage, a unique access point for customers or clients and an area of the house devoted to the business can be used as evidence to claim occupancy costs.

Unfortunately, quite a few home-based businesses fail to meet these criteria i.e. tradespeople who carry out the majority of their work onsite. For these kinds of home-based business owners, it is much easier to claim for running costs. This is because all that needs to be proven is that there is an office in the house that is used for business purposes i.e. tradespeople would be eligible to claim running costs for an office they used to prepare invoices, quotes or for research and planning.

Even though claiming occupancy and running costs as a tax deduction can provide home-based business owners with a tax benefit, it can have an expensive flip side. Owners should take note that once their home becomes more than their main residence, there is a high chance that it will end up in the CGT system.

While a general CGT exemption exists for main residences, it can be lost due to the extent that the home is used as a place of business.

Posted on 21 October '15 by , under Tax.

Leave a Comment

You must be logged in to post a comment.

Join Our Mailing List!

Subscribe to our mailing list to receive all the latest financial newsletter updates as well as information on important dates on our business calendar.

Recent Updates

Firm News

What to consider when consolidating your super

The ATO reported that 45% of working Australians were not aware that they had multiple super accounts in 2016. Having multiple super accounts is particularly common for individuals who have had more than one job. If this is you, it is important to identify and manage your super accounts because having more than one can be costly as a result of account fees from multiple funds.To combat this, you may want to consolidate your super, which moves all your super into one account. Not only does this save on fees, but it also makes your super easier to manage and keep track of.

Before consolidating your super, it is important to do the following:

Research your funds' policy
Compare your active super accounts so you can make the right choice about which one you should close. Things to assess include:

  • Exit fees
  • Insurance policies
  • Investment options
  • Ongoing service fees
  • Performance of the funds

Check employer contributions
Changing funds may affect how much your employer contributes, as some employers contribute more to certain funds. Check your current accounts to see if changing funds will affect this. Once you have selected a super fund, regardless of whether you choose a new super fund or one of your existing ones, provide your employer with the details they need to pay super into your selected account.

Gather the relevant information
When consolidating your super, you will need to have the following details ready:

  • Your tax file number.
  • Proof of identity. This could include your driver's license, birth certificate or passport.
  • Your fund's superannuation product identification number (SPIN).
  • Your fund's unique superannuation identifier (USI).
  • Details of your previous fund.

Business Calender