Using your home for business
If you’re self-employed and run your business from home, you can claim the part of your house you use for business as an expense in your tax return.
What you can claim
You can claim for any space you use primarily for your business. This could be:
- your home office
- your garage if you use it to store stock
- your workshop.
You need to work out the percent of your home’s total size you use for business — this is the percentage of your household expenses you can claim.
So if your house is 100 square metres and your office is 10 square metres, you can claim 10% of what you pay in:
If you’re registered for GST, you’ll need to remove the GST content of each expense and claim it separately in your GST return.
If you own your house
You can also claim a percentage of the interest you pay on your mortgage — but you can’t claim repayments of the principal. There’s no GST on this, so it doesn’t matter if you’re registered for GST or not.
Claiming phone costs
- use your home line for business calls and run your business from your house, you can claim 50% of the line rental
- have a separate phone line for your business, you can claim 100% of that line — but none of your home line.
You can also claim business-related toll calls.
How to claim
You need to keep a record of all your expenses.
At the end of the financial year, you (or your accountant) will work out your taxable income by taking all your expenses off the total amount you earned. You pay tax based on this number, so you’ll pay less tax the more expenses you can claim.