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  • Home office expenses for a home-based business

    If you are a sole trader and your home is also your place of business you can claim tax deductions for a portion of the costs of owning, maintaining and using your home for this purpose. When you sell your home you may be liable for capital gains tax.

    If you operate a business at or from your home, you may be able to claim a deduction for some of the expenses relating to the area you use for business purposes.

    These expenses can be divided into two broad categories:

    • occupancy expenses (such as mortgage interest or rent, council rates, land taxes, house insurance premiums)
    • running expenses (such as gas and electricity, phone, decline in value of plant and equipment, decline in value and cost of repairs to furniture and furnishings, cleaning)

    As for motor vehicles, if you are carrying on a home-based business you can claim the cost of trips between your home and other places if the travel is for business purposes.

    Generally, you can ignore a capital gain or loss you make when you sell your home, unless you have used any part of it for business purposes.

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    Last modified: 08 May 2018QC 33864