| Disclaimer You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of private advice
Authorisation Number: 1052471303025
Date of advice: 4 November 2025
Ruling
Subject: Work related deductions - depreciation
Question
Are you entitled to a deduction for the depreciation on your xx home used as a home office.
Answer
Yes.
Based on the information provided to the Commissioner the xx home is a capital asset, and as the purchase cost is capital in nature no deduction is allowed under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997). However, as outlined below a depreciation deduction is allowed under Division 40 of the ITAA 1997 for the income producing use of the xx home.
Section 40-25 of the ITAA 1997 allows a deduction for the decline in value of a depreciating asset you hold, to the extent the asset is used for a taxable purpose. Taxable purpose is defined in paragraph 40-25(7)(a) to mean for the purpose of producing assessable income. Where an asset is held for a non-taxable purpose, no deduction is allowed under Division 40.
A xx home is regarded as a depreciating asset for Division 40 of the ITAA 1997.
You use the xx home exclusively as a home office.
You can claim a deduction for the decline in value under section 40-25 of the ITAA 1997 for the xx home.
This ruling applies for the following periods:
Year ended 30 June 20XX
Year ending 30 June 20XX
Year ending 30 June 20XX
Year ending 30 June 20XX
Year ending 30 June 20XX
The scheme commenced on:
1 July 20XX
Relevant facts and circumstances
You are employed by Employer Z.
You are employed in a specific role.
Your work covers Australia and international countries.
You are required to work from home most of the time and you attend the office a number of days a month.
You purchased a xx home.
The xx home is a xx structure on xx that is to serve as your home office as you are expected to be working from home a significant amount of time.
It is fitted with an office desk, multiple monitors, office chair, router, printer along with a bathroom so that you can work several hours a day when you need to work from home.
It is mainly fitted as your office.
It has a couch for you to take a break or work in a more relaxed environment.
The xx home is fitted with a bathroom, a sink, and a small fridge. It has some closet space for you to store your suits and work attire as you do engage in client/work video conference calls regularly.
The xx home is utilised exclusively as a home office, and it has been and will be used as such.
The xx home is not intended to be used as a home for you nor your family.
The xx home is located at your home address.
The xx home is a separate structure and is not connected to your home.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 8-1
Income Tax Assessment Act 1997 section 40-25