Home business 

Home-based businesses are small businesses that operate from the owners home. The attractions of starting and running a business from home include:

  • Tax savings from making some of the home occupancies costs tax-deductible.
  • Reduction in overhead costs.
  • More work time as no time is lost commuting in traffic.
  • It improves work/life balance.

A home-based business will be entitled to deduct a portion of their home occupancy costs, including home mortgage interest, 2.5% building write-off, rates, rent, insurance, and maintenance. The amount claimed is calculated as a percentage of the floor area (in metres squared) of the house, garage, and land that is used exclusively for business purposes. For home-based businesses, this averages 10-25% of the total.

Although operating a home-based business will make the primary residence subject to capital gains tax on the sale, applying the small business CGT concessions will reduce this liability to nil.