Private ruling: Home office occupancy expenses
Date of advice: 23 August 2017
Published: December 2017
Ruling period: Year ending 30 June 2017
Date scheme commenced: 1 July 2016

Ruling: Q1: Are you able to claim a deduction for occupancy expenses in relation to your home office space? | A1: Yes. Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income, except where the outgoings are of a capital, private or domestic nature, or relate to the earning of exempt income. As it is considered your home office is a place of business, you may claim occupancy costs such as a proportion of rates, mortgage interest and insurance premiums. The proportion of occupancy expenses should be calculated as a percentage of floor space compared to that of the entire dwelling, including garage space. Taxation Ruling TR 93/30 is about home office expenses. Occupancy expenses, are expenses relating to ownership or use of a home which are not affected by the taxpayer's income earning activities. These include rent, mortgage interest, municipal and water rates and house insurance premiums. Further information Capital gains and the main residence exemption Generally, you can ignore a capital gain or loss you make when you sell your home or main residence (under the main residence exemption). However, you are not entitled to the full main residence exemption if your home is used for the purpose of gaining or producing assessable income during the period of ownership. When an area of a home is set aside and used as a place of business the capital gains provisions will apply.

Relevant facts and circumstances: You are an employee of an online business. You work from your home office more than 25 hours per week, delivering online lectures. You stand at an employer provided desk, and the students can see and hear you on their computers, but you cannot see or hear them, they communicate with you by keyboard. The home based online lectures can be delivered to students anywhere nationally and internationally. No one else uses the home office for any purpose; your spouse has their own separate computer space for their own purposes. You apportion any of your private computer and office work that you do in your home office.