24 March 201803:00 PM - edited 30 March 201811:36 PM
Did you know that as an employee you may actually be able to claim occupancy related expenes if you have a home office (under certain circumstances) ?
The ATO has a public ruling TR 93/30 which states you may be able to claim occupancy expenses if your home office has " the character " of a place of business even if you are an employee.
Taxation ruling TR93/30 para 4 states -
Whether an area of the home has the character of a place of business is a question of fact which depends on the particular circumstances of each case. This is likely to be the case where a part of a residence is set aside exclusively for the carrying on of a business by a self employed person (e.g., a doctor's surgery). Another example is where part of the home is used as a taxpayer's sole base of operations for income producing activities (e.g., where no other work location is provided to an employee by an employer).
The section that relates to employees is in bold italics.
This means even an employee under certain circumstances can have a home office that has the character of a place of business, and can claim occupancy expenses (or a portion of) as tax deductions.
If you are an employee with a home office and consider that your home office could potentially be "characterised as" a place of business, then the best way to approach this issue is to apply for a private binding ruling from the ATO, its an easy enough process and you have a lot to gain if you get a favourable ruling.
Home owners need to be aware that the cost/benefit equation is very different for renters v home owners. As a home owner, if you are able to claim occupancy home office expenses, it will affect your ability to claim a “main residence exemption” for capital gains tax purposes. This could leave you having to pay capital gains tax on your family home if you sell it. Needless to say, this tax liability could be far in excess of any tax benefits that the home owner might have enjoyed over previous years. Home owners will need to do their sums...