Home – New Forums Starting your journey Claiming rent as a tax expense… Claification.

  • This topic is empty.
Viewing 12 posts - 1 through 12 (of 12 total)
  • Author
    Posts
  • #978904
    Anon
    Member
    • Total posts: 96
    Up
    0
    ::

    Howdy, just hoping for some clarification on this. If you are self employed and work from home, I understand that you can claim a portion of rent on tax as long as the rooms are solely for business. Have I got these sums right?

    So as example, townhouse is $800 week rent and is 28sqm (living space). The 2 rooms being rented is 7sqm. Would this mean I can claim $200/week as a tax expense?

    Is it this simple and any other things I need to be careful/wary of?

    #1110524
    Chris – Marketing
    Member
    • Total posts: 162
    Up
    0
    ::
    Anon, post: 122975 wrote:
    Howdy, just hoping for some clarification on this. If you are self employed and work from home, I understand that you can claim a portion of rent on tax as long as the rooms are solely for business. Have I got these sums right?

    So as example, townhouse is $800 week rent and is 28sqm (living space). The 2 rooms being rented is 7sqm. Would this mean I can claim $200/week as a tax expense?

    Is it this simple and any other things I need to be careful/wary of?

    Yes u can claim a portion if u r renting. If u own your dwelling then I suggest u need to consider capital gains when selling – your private home does not incur capital gains if not used as a business. U can also claim % electricity/gas….speak to your accountant as they can be quiet creative (legally).

    Chris Poulios
    http://www.satisfaction-marketing.com.au
    http://www.webthreads.com.au

    #1110525
    Normanby
    Member
    • Total posts: 194
    Up
    0
    ::

    I agree with Chris, and would add the the ATO have some other criteria for a “place of business”, like; do you see clients in your home-office?
    But you’re right about the % of the square meterage, provided you include the entire property as stated on the title.
    That includes any garden, car space, garage, etc…
    Matt
    http://www.NoHassleAccounting.com.au

    #1110526
    Anon
    Member
    • Total posts: 96
    Up
    0
    ::

    I completely screwed up my wording when I wrote:

    So as example, townhouse is $800 week rent and is 28sqm (living space). The 2 rooms being rented is 7sqm. Would this mean I can claim $200/week as a tax expense?

    What I was trying to say was:

    So as example, townhouse is $800 week rent and is 28sqm (total living space). I’m using 2 rooms solely for business (office and store room) which makes up 7sqm (1/4th of total space). Would this mean I can claim $200/week as a tax expense?

    #1110527
    Zava Design
    Participant
    • Total posts: 1,463
    Up
    0
    ::

    Okay, this I can give some advice on direct from an ATO advisor.

    Which, I have to add, is one of the great free services the ATO offer: You can ask for an ATO advisor to visit your home/small business location, and they can give advice to you, and nothing that they see or you say to them can be used by the ATO.

    Anyway, when one of their advisors came to visit me last year, I asked him about the whole rent deduction thing, thinking it could be for a room I used as an office only. However he said I should claim more, to include my daytime (“work hours”) use of the kitchen & bathroom too.

    So basically it seems that if you’re being reasonable, the ATO will not be anal about this area of your claims. I figure they have more things to worry about than a small business owner claiming 30% rather than 20% of their rent.

    But as I said, take advantage of the free ATO service and ask them yourself.

    Cheers.

    #1110528
    Anon
    Member
    • Total posts: 96
    Up
    0
    ::

    Zava thanks heaps for your post mate.

    #1110529
    Anon
    Member
    • Total posts: 96
    Up
    0
    ::

    Just further to this. If I was to rent a 1 bedroom apartment, or even a studio apartment would this make things more difficult? I mean if I was to rent a 2 bedroom, I would use that entire spare bedroom as a work space so it would be easy to calculate what I can claim. But if it’s just a 1 bedroom or studio where I would work from an area in the living room, would i just have to work out an area of space within the living room to be able to claim?

    Would you normally need to mention something to the property manager that you intend to use an area for work for tax purposes?

    #1110530
    MyGreatIdea
    Member
    • Total posts: 2,278
    Up
    0
    ::

    Probably best to read the small print in the lease to see if there’s any mention of operating a business from the premises before you approach the property manager.

    Wendy :)

    #1110531
    Zava Design
    Participant
    • Total posts: 1,463
    Up
    0
    ::

    No need to mention to property manager unless your business will impact on neighbours.

    And you simply estimate the area used for work, the tax department isn’t going to have an issue if the estimation is reasonable. So as my ATO advisor recommended, estimate a little on the high side, you won’t have a problem.

    #1110532
    Divert To Mobile
    Member
    • Total posts: 2,751
    Up
    0
    ::

    Very well put Zava, I didnt know about some of those things.

    Could I also add that business operations usually need electricity, phone and internet.

    Steve

    #1110533
    IncredibleCo
    Member
    • Total posts: 406
    Up
    0
    ::

    Ooh cheers for that free advice!

    #1110534
    Anon
    Member
    • Total posts: 96
    Up
    0
    ::

    Just a quick question further to this.. I don’t think so, but is there any GST associated with paying rent? Or would you only be able to do/claim that on commercial renting.

Viewing 12 posts - 1 through 12 (of 12 total)
  • You must be logged in to reply to this topic.