Changes to home office expenses

Changes to home office expenses will apply from the 2022–23 income year.

What are the main changes?

There is an increased onus of proof to support your expenses claims.

From 1 July 2022, you should keep:

•   records of all the hours you work at home

•   receipts for all depreciating assets or equipment you use when you work at home

•   records of your personal and work-related use of assets.

What expenses can’t I claim?

Expenses you can’t claim for home office if you work from home:

•   coffee, tea, milk and other general household items, even if your employer may provide these at work

•   costs that relate to your children’s education such as equipment you buy – for example, iPads and desks, subscriptions for online learning

•   items your employer provides – for example, a laptop or a phone

any items where your employer pays for or reimburses you for the expense.

What are occupancy expenses?

Occupancy expenses are expenses you pay to own, rent or use your home. They include:

•   mortgage interest

•   rent

•   council and water rates

•   land taxes

•   house insurance premiums.

Can I claim occupancy expenses?

As an employee working from home, generally you can’t claim occupancy expenses. 

In the event that you do claim occupancy expenses, there will be capital gains tax (CGT) implications for your home, ie, you may have to pay CGT when you sell your home.

You can only claim occupancy expenses if you can show that:

•   it was necessary for you to work from home and your employer does NOT provide you with a working base.

•   the area of your home that you use for work is exclusively or almost exclusively used for work purposes and isn’t readily capable of being used for any other purpose.

How do I claim occupancy expenses?

Occupancy expenses can generally be apportioned on a floor area basis. You must also apportion your expenses on a time basis if you only use that area of your home for work purposes for part of the year.