Any expense that is incurred at home when the home is used partly as business premises or when work related activities are conducted at home can be deductible as home office expenses.
To be eligible to claim home office expenses, there must be:
- A relationship between using the home and the business-related activities; and
- A direct proportion of the home is easily identified as being used for work related activities
The amount of the expense that is deductible can be calculated as follows:
- Expense * (Area of home used for business)/(Total area of home)
Common examples of home expenses that are deductible are:
- Interest on the home loan
- Depreciation (prior to 2012 financial year)
- Rent
- Repairs and maintenance
- Telephone rentals and some toll calls. Â (Rentals are usually deductible at 50% but can be increased to a higher percentage if records can prove so)
- Land and water rates
- Electricity
