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Edited version of your written advice
Authorisation Number: 1051462424383
Date of advice: 25 March 2019
Ruling
Subject: Running and occupancy costs of a home office
Question
Can I claim a deduction for the running and occupancy costs of a home office?
Answer
Yes.
Taxation Ruling TR 93/30 outlines the factors that indicate whether or not a home office has the character of a place of business.
This is likely to be the case where part of a residence is set aside exclusively for the carrying on of a business by a self-employed person, such as a doctor or dentist with a surgery or consulting rooms at home or a tradesperson with a workshop at home
An apportionment of the area of the home used for business use is usually done on a floor area basis.
Where a home office has the character of a place of business, a proportion of running costs and occupancy costs can be claimed as a deduction.
Running costs including heating, cooling, lighting and the decline in value of office furniture. Occupancy expenses include rent, interest, rates, insurance and repairs.
This ruling applies for the following period:
Year ended 30 June 2018.
The scheme commences on:
1 July 2017.
Relevant facts and circumstances
This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.
● You are a self-employed occupational physician.
● You obtain a registered and active Australian Business Number.
● You have obtained approval from the Council to operate a business from your main residence and display signage.
● Your main residence consists of 4 bedrooms, 3 bathrooms, 2 kitchens and 1 garage.
● There is an additional room (home office) and (office) carport separate to the main house, which is exclusively used for business.
● The total area of the house is 280 meters squared.
● The home office is 66 meters squared and approximately 23.6% of the total area.
● The home office is used to conduct patient consultations, treatments, training of other doctors and business administration.
● The office carport is located directly in front of the home office and is exclusively used to provide parking to patients.
● The operating house of your business are Monday and Wednesday 9am- 5pm and Friday 9am to 11am.
● You have 1 employee.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 8-1